The meeting was called yesterday as a last resort to find a solution to the Greek impasse, with the complete failure of the summit of finance ministers last Thursday to seal a deal allowing Greece access to 7,200 mln euros of aid under the rescue plan in place.
While the eurozone countries members and creditors of Athens with IMF support, returned to the charge for the government of Prime Minister Alexis Tsipras accept impose fiscal adjustment in exchange for aid, he refuses to accept greater social cuts and calls for renegotiation of the foreign debt.
This situation, which has persisted since late January when the government assumed Syriza, seems to have now reached a point of no return.
“The situation in Greece is becoming critical. We are near the point where the Greek government will have to either accept what I think is a good deal for continuing to support or move towards the payment suspension “of its debt, President of the European Council, Donald Tusk said yesterday.
This diagnosis point it has reached the Greek crisis is not only precise and sharp but unambiguously defines the time which has knowingly taken the “ex troika” of the ECB, EU and IMF.
The new and unforeseen European summit will be held tomorrow in amid a massive flight of capital from the banks Hellenes, between Monday and Wednesday, it exceeded 2,000 million. Other financial sources put the outflow of deposits from banks 5,000 million for the whole week.
A reality which is not as the result of uncontrollable forces last week amid internal financial panic, Central Bank of Greece announced an absolutely critical government report Tsipras and which predicts a chaotic future of the country in case of suspension of debt repayments.
The result of this hostile intervention monetary authority whose anti-government leftist position is well known, has been the acceleration of capital flight and creating a climate of high uncertainty and fear among the population and the Greek business world.
showing that squeezes but does not strangle, at least for now, the ECB decided yesterday to increase emergency lending to Greek banks, after the Bank of Greece (central bank) so requested after a withdrawal of 1,500 million euros to Over the last day of the week.
In a calculated manner, the ECB granted to the Greek authorities an additional 1.750 million instead of the 3.500 million requested by the Bank of Greece, as it is estimated that with this figure the system can meet the avalanche of deposits which will occur on Monday before the summit to be held at 7 pm when the banks are already closed.
The rumors, fed from the same dome ECB on Monday indicated that banks could not open their doors.
Now, after this concession last minute and that serves to urge the Greek negotiators to surrender to the creditors, is given to the Greek government one more day before meeting rolling down the abyss.
” We hope that on Tuesday morning the Greek government faces the choice of going to a deal ….. clearly or immediately impose capital controls, “an analyst at Credit Suisse.
Actually this proposal to impose capital controls he was made to Greece in the failed meeting on Thursday, when the Greek Finance Minister, Yanis Varoufakis, rejected it outright and tightened further string of negotiations with its creditors.
“A monetary union to accept capital controls is a monetary union that accepts that it has failed in its task of preserving the free flow of capital” Varoufakis responded to a suggestion that had been advanced by the Bank of Greece days before and in clear collusion with the eurozone and the ECB.
The creditors will come to the summit with an ultimatum to offer consisting Tsipras last release 7,200 million aid for his government to comply with their debts to them by the end of August, in exchange for accepting Greece cut pensions, increase electricity tariffs, ensure primary fiscal surplus of 1.5% and the whole privatization plan in place, including the port of Piraeus .
Only after the government of Syriza accept this setting unmitigated, creditors would be willing to discuss a plan to restructure the debt, that is, an extension of the payment terms of an unpayable debt 300,000 million of which 160,000 million are German and French banks and the governments of the Eurozone.
Tsipras’s refusal to accept the ultimatum automatically starts the default and with it, the slip Greece out of the euro, that is, the first break of the monetary unit of the entry into circulation of the euro on 1 January 2002.
Nonpayment of debt lead to an immediate banking crisis in Greece and a general economic crisis, with reintroduction of the drachma as its currency, high inflation, isolation of the European financial system and a reorientation of foreign policy with an eye toward Russia and other countries of the world.
This was feared German Chancellor Angela Merkel, who seeks to avoid this end, although its rigidity Tsipras pushes down that road, although you can not rule out at all an agreement in extremis not solve any problems but permitar background clothes save both parties.
A true miracle at first glance, but senior European officials see as a possibility which may occur in the Summit on Monday .
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