The new Greek finance minister meets Thursday in Berlin with his German counterpart after the European Central Bank has deprived the Greek banks an important channel of funding, thus accentuating fears of a financial strangulation of Athens.
Yanis Varoufakis will be greeted in the morning by Wolfgang Schäuble, one of the most ardent supporters of budgetary rigor in Europe. This should be the last stage of the operation of seduction of the new Greek leaders before its European partners, in order to renegotiate its debt of over 300 billion euros and end the cure of rigor imposed in return for international loans.
But the ECB announced late Wednesday it will stop accepting Greek sovereign debt as collateral to lend to banks in the country, with lower guarantees that they used to. The ECB statement had an immediate effect on the financial markets and brought down Wall Street and the euro.
The decision of the ECB has no “adverse effects” in the Greek financial sector, which remains “fully protected” through other channels available liquidity, immediately declared the Greek Ministry of Finance.
Greek banks now theoretically have the option of emergency mechanism called ELA, which allows central banks to finance credit institutions. Through this mechanism, “the Greek banking system remains adequately capitalized and fully protected,” said the Greek Ministry of Finance.
This decision “transfers the pressure to the Eurozone for rapid progress towards an agreement that benefits everyone “on the future of Greek debt and economic reforms in the country, he added.
Varoufakis traveled in person to Frankfurt on Wednesday to ask Mario Draghi, ECB president, a form of” keep your head above water “while it agrees with its European partners.
Increase pressure
The head German government Angela Merkel said that “in the background” other European countries had not changed position, remain opposed to a debt relief and want Greece to continue reforms.
Paris, where he received Wednesday at Tsipras, President François Hollande advocated “two principles”: “solidarity” and “respect (…) European standards apply to all”. In Brussels, European Council President Donald Tusk hinted “fierce efforts” to reach a solution.
Draghi did not seem more flexible and asked Varoufakis to “negotiate quickly and constructively” Eurogroup with its partners to ensure “financial stability” of Greece , a source of the ECB. The governing council met in Frankfurt on Wednesday afternoon and decided to increase the pressure to Athens.
The decision announced by the ECB marks the end of an advantageous system that was part of the rescue plan. Consequently banks may not use ECB loans to buy Greek debt. The arrangement was conditioned by the program for Greece until the end of February.
Nor zero
But ” can not be anticipated now a positive outcome “of the aid program writes the ECB in its statement. In other words, wants clarity on the future of the program -does will perform the reforms initiated? What happens after February- before reopening the faucet.
The institution does not leave entirely to zero to Greek banks. On the one hand, they can always provide as collateral to the ECB other assets apart from the Greek public debt.
Moreover, Greek banks have now theoretically option emergency mechanism called ELA, which allows central banks finance credit institutions.
The ECB warning came after Tsipras will display “very optimistic” in Brussels about the possibility of “finding a viable solution for our future.”
Tsipras proposed to the President of the European Commission, Jean-Claude Juncker, the EU develop a reform plan and financing to four years (2015-2018), according to a government source in Athens.
This plan includes a “radical” program in the fight against corruption and tax fraud, accompanied by a “financial balance” of Greece , which would abandon the requirement to achieve a primary surplus “monstrous” 4.5% of its Gross Domestic Product (GDP).
Several European leaders demanded action against corruption and cronyism, including President of the European Parliament, Martin Schulz, Deputy Foreign Minister of the Government or German and Economy Minister Sigmar Gabriel.
In Athens, ten days after the victory of Syriza radical left in the legislative, Parliament won by the most anti-austerity meets on Thursday for the first time.
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