Greece will be on the support mechanism until 2017!

German chancellor Angela Merkel reserved a new surprise for markets, investors, partners, political friends and opponents alike.

A few hours before the start of the most crucial EU Summit to date, with the sole purpose of adopting a "final solution" for the Greek debt, the German Chancellor distributed to German delegates, but also "leaked" to parliament members and international media agents, a "secret" report, which says Greece needs a "long-term haircut", immediate debt slashing by at least 60% and additional ''generous'' help, as she calls it, in order to serve its debt obligations. 

The report argues that the Greek economy is deteriorating and is convinced that recovery in the current circumstances is unrealistic. It characteristically states that "in the best case scenario, Greece will return to the markets in 2027"… 

The question, however, is whether these leaks are associated with the actual image of the Greek economy and the intentions of Germany to address the matter drastically, or whether it’s a far-fetched assessment of the situation that will work as "blackmail" towards the German MPs to support the plan to strengthen the rescue mechanism in the euro area during the vote that will take place a few hours before the crucial Wednesday summit. 

Merkel is required to ensure ratification of her positions by the Bundestag before going to Brussels to negotiate an agreement with other EU leaders. But at this last minute many MPs, even of her party, are saying they have yet to comprehend the details of the rescue plan for Greece. 

The latest information says the German coalition government and opposition parties have agreed on a joint proposal to leverage the EFSF, which will be tabled tomorrow, Wednesday, in parliament. 

Citing government sources, Reuters mentions that the proposal will pass although it’s possible that at least 7 Members of the Christian Democrats (!) might vote against it. The final proposal that will be submitted for approval provides that the EFSF will replace the ECB in the purchase of government bonds, while it sets the deadline for the recapitalization of banks on June 30, 2012.