Financial Times: ECB green light for increase in emergency loans to Greek banks
The European Central Bank has approved an increase in emergency loans to Greece’s banking system after eurozone finance ministers failed to strike a deal to prevent it from defaulting on its debts.
The move, which is by a smaller amount than Greece had requested, comes as Greek banks have continued to suffer withdrawals.
The ECB has been providing Greece’s banks with a lifeline by sanctioning so-called emergency liquidity assistance (ELA) requested by the Bank of Greece, the country’s central bank.
However on Friday, the ECB’s governing council granted a rise smaller than the €3bn-plus requested by Athens, two people familiar with the matter said.
WNU Editor: This is not going to solve and/or stop the problem. It is what it is .... a temporary reprieve to a hopeless situation.
More News On Greek Banks Receiving Emergency Funding To Stem Bank Withdrawals
ECB raises emergency funding for Greek banks by $3.7bn -- CNBC
Greece gets temporary lifeline for banks amid uncertainty -- AP
Tsipras optimistic on Greek debt deal as banks bleed -- Reuters
'Capital controls imminent' as money floods out of Greece's banks and default looms -- Business Insider
Greek banks: Athens’ Achilles heel -- Ferdinando Giugliano, Financial Times
2 comments:
After many deadlines, this one seems real, and someone will have to blink.
1. The EU, led by the Germans, will decide not to continue subsidizing Greece unless Greece reforms. The EU will calculate that the damage to them from a Grexit is containable. Moreover, if the EU caves to Greece, every other European country (Portugual, Spain, etc.) will want subsidies too.
2. Tsiapras and his Government will refuse to reform, and will simply demand that the EU subsidize Greece indefinitely. Tsiapras and his Government calculate that the damage to the EU from a Grexit is sufficient that the EU will subsidize Greece without requiring reform.
3. Both Tsiapras and the EU leadership can't be right. Greek default is inevitable.
4. Tsiapras and his Government are likely at peace with the enormous disruption and poverty about to hit the Greek people. First, the Government elites will not personally suffer. Second, austerity is inevitable; the only question is: what form will austerity take? By remaining in the Euro zone, austerity would take the form of fewer Euros to spend. By leaving the Euro, austerity will take the form of inflation. Think a wheelbarrow of drachmas to buy a loaf of bread, Weimer style. As communists, Tsiapras and his Government are fine with inflicting poverty on the Greek people so long as he can blame others and convert his people's misery to his political advantage. The Castros understand that dynamic.
As usual Publius .... (quoting an EU politician I know who just email me a minute ago after reading your comment) .... your analysis is spot on.
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