ECB , with decision to reject Greek bonds as collateral for financing, leaving Greek banks dependent on its Central Bank Nacional. Germany insists that Athens must meet the terms of the bailout of 240,000 million euros.
No bailout, Greece faces a budget deficit of 9,000 million euros this year.
The new leftist Greek Finance Minister openly clashed today with its powerful German counterpart, while borrowing costs soared to Athens and the actions of its banks collapsed following the decision of the European Central Bank to curb the financing from lenders in the country.
After the free talks in Berlin, German Finance Minister, Wolfgang Schaeuble , said he told his Greek counterpart, Yanis Varoufakis , which is not realistic to make campaign promises that affect other countries and that they had “agreed to disagree”.
A challenging Varoufakis, whose leftist government was elected on a platform that end proposed austerity measures and negotiate a debt relief, contradicted him in a joint press conference, saying that “even agreed to disagree”.
Schaeuble said that, while respecting the choice of Greek voters, is essential that the new government to meet the agreements reached with the European Union and work with the International Monetary Fund, the ECB and the European Commission.
The Government ten days of Prime Minister Alexis Tsipras has said it will not extend the bailout program expires later this month and has refused to cooperate with the so-called “troika” of international creditors.
Also said reverse unpopular measures imposed by foreign creditors and stop some privatizations will raise the minimum wage, hire new workers in the public sector dismissed and reset a bonus for poor pensioners.
“Greece will no longer accept more orders, especially Orders received by email,” Tsipras told his parliamentary group left, denying that have returned . with empty hands of their European tour
In an apparent reference to the tough stance adopted by the ECB and others, Tsipras said: “Greece can not be blackmailed, because democracy in Europe can not be blackmailed. “
Hard blow to Greek banks
The decision of ECB announced Wednesday, to stop accepting Greek bonds as collateral for financing, home central bank moved to the burden of financing their own banks, dealing a setback to efforts by the government to buy time to negotiate a new debt deal .
The banking index of the Athens Stock Exchange plunged 22.6% initially and ended with a drop of 10%.
The cost of three-year loans to the Government fired up about 20%, leaving Greece virtually out of the capital markets.
Varoufakis said Athens proposed a bridge program until late May to allow time for talks on debt, ensuring that Greece will do everything possible to avoid default.
He claimed he did not talk with Schaeuble on a program for debt repayment, or a possible reduction to creditors officers.
As I climbed the pressure between its EU partners, Tsipras achieved a gesture of support from Russian President Vladimir Putin, faced with the West over the crisis in Ukraine, who through a phone call invited to Moscow on May 9 and talked about increasing cooperation in energy and economy.
Varoufakis on Wednesday called in vain for the president of ECB , Mario Draghi, to maintain normal funding of Greek banks for several months while Athens negotiates an agreement on its debt.
In a policy document circulated among EU officials and the who had access Reuters, Germany said that Greece must meet the terms of the bailout of 240,000 million euros negotiated by the previous government, and not undo planned privatizations and cuts in the minimum wage, pensions and the public sector workforce.
ECB has given the green light to the Greek central bank to contribute to the country’s banks up to 60,000 million euros in emergency liquidity if necessary, two people familiar with the decision said. The ECB declined to comment.
Without a bailout funding, Greece faces a budget deficit of at least 9,000 million euros this year because tax revenues being lower than expected, has given up some privatization plans and made new promises of spending unevaluated.
The Vice President of the European Commission, Valdis Dombrovskis said Athens should extend its current bailout program to gain time to negotiate a long term.
“In the evaluation of the European Commission, the most realistic way of going forward is (…) extend the duration of the program for another couple of months or half a year, “Dombrovskis said at the Reuters summit on the euro area.
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