Greece earns Euro zone leaders’ dismay over proposal rejection

Just when almost everyone thought, including market participants that Greek drama is over, it came back with a jolt and shook everyone last week.

• Greek Prime Minister Mr. Alexis Tsipras were handed the new bailout terms, which was much accommodative than the previous one, though not as loos as Greece was demanding. Creditors revised primary surplus target for this year to 1% of GDP and 2% for next year compared to 3% and 4.5% as per previous agreement. Primary surpluses stands as good proxy for level of austerity. Higher the surplus, higher the austerity.

Greek government not only rejected the proposal, it delayed the IMF payment by choosing the option to bundle the repayment. As per IMF provision, a member can bundle IMF payments due in one month and pay the total before the end of month.

Though it is not a default but the provision was last used by Zambia, 30 years ago.

Though the proposal was not an ultimatum but creditors were clearly displeased with how the proposal was rejected in Greek parliament.

• European Union president Jean Claude Juncker are reported to not have received Tsipras's phone call. According to him, Greek has not delivered a counter proposal so that leaves nothing to be discussed further.

• European leaders and finance ministers are clearly frustrated with Greece. Slovak finance minister wrote to twitter after hearing Tsipras's speech "I wonder whether this is the same tsipras who was in Brussels".

Time is clearly running out for Greece as June 30 looms as deadline for both IMF payment of € 1.5 billion and 4 months bailout extension.

Risk of Grexit and Greek referendum on Euro has gone up significantly.

Euro lost its charm over the development, trading currently at 1.112 against dollar.