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EU and Greece Running Out of Time – As Bank Runs Intensify, Bail-Ins Likely
EU and Greece Running Out of Time – As Bank Runs Intensify, Bail-Ins Likely
- EU and Greece running out of time as talks end “in disarray” – again
- Greece warns Merkel of ‘impossible’ debt
- Concerns Greece out of money by end of April
- Friday’s “agreement” in Brussels falls apart hours later as protagonists fail to agree on specifics
- Greece now insolvent – will run out of liquidity by end of April
- Greek banks on verge of collapse as runs continue – €1.5 billion emptied out of banks last week alone
- ‘Grexit’ could propel gold to over $2,000/oz
- Cyprus style bail-ins look increasingly possible
Greece’s place in the Eurozone is as precarious as ever as talks between Prime Minister Tsipras and European leaders in Brussels broke down – hours after reaching general agreement – and Greece warned Germany that it will be “impossible” for Greece to service debt payments due in the coming weeks if the EU fails to provide short-term financial assistance.
Greece – faced with illiquidity, insolvency and a potential banking collapse – is running out of time and appears to be on the back foot as its international creditors refuse to countenance any debt restructuring, rescheduling or forgiveness.
The warning from Greece came in a letter from Tsipras to Angele Merkel provided to the Financial Times. It comes as concerns mount that Athens will struggle to make pension and wage payments by as early as next week, the end of March, and could run out of cash completely before the end of April.
The letter, dated March 15, came just before Ms Merkel agreed to meet Mr Tsipras on the sidelines of an EU summit last Thursday and invited him for a one-on-one session in Berlin, scheduled for Monday evening.
In the letter, Tsipras warns that Greece will be forced to choose between paying off loans, owed primarily to the IMF, or continue social spending. He blames ECB limits on Greece’s ability to issue short-term debt as well as eurozone bailout authorities’ refusal to disburse any aid before Greece adopts a new round of economic reforms.
“Given that Greece has no access to money markets, and also in view of the ‘spikes’ in our debt repayment obligations during the spring and summer . . . it ought to be clear that the ECB’s special restrictions when combined with disbursement delays would make it impossible for any government to service its debt,” Mr Tsipras wrote.
He said servicing the debts would lead to a “sharp deterioration in the already depressed Greek social economy — a prospect that I will not countenance”.
At a press conference on Friday Angela Merkel said “the Greek government has the opportunity to pick individual reforms that are still outstanding as of 10 December and replace them with other reforms if they . . . have the same effect,” according to the Financial Times.
That Merkel would consider holding Syriza to an agreement made between Greece’s previous government and the Troika – which Syriza have eschewed – shows how little progress has been made in the intractable negotiations between the two sides since Syriza came to power.
All that has changed is that Greece is more insolvent and Europe has bought time to deal, albeit reluctantly, with a “Grexit”.
Bloomberg confirms that the Greek government may run out of cash to pay pensions and salaries in April.
“Locked out of capital markets and with its coffers running dry, Greece is scraping the bottom of the barrel to pay pensions and salaries amid signs that it could run out of money by early next month.”
At the same time, Bloomberg reports that €1.5 billion was withdrawn from Greek banks last week alone.
January saw record drops in deposits in Greek banks. The banks have been drawing from the Emergency Liquidity Assistance (ELA) program to stay afloat. The ELA is operated by the Greek Central Bank but is reviewed weekly by the ECB.
Greece’s central bank requested a raise to the ELA ceiling to deal with the bank runs. The ECB approved a €400 million raise in the ceiling – less than half of what was requested, according to Bloomberg.
Depositors in Greek banks, both individuals, small and medium enterprises and corporates are becoming increasingly concerned about the twin risks of default and return to the drachma or remaining in the monetary union and potentially having Cyprus style bail-ins imposed on Greek savers.
Time certainly appears to be running out for Greece. Either Syriza capitulates and returns to the Troika’s bail-out mechanism – highlighting a complete loss of sovereignty, or Greece defaults and exits the Eurozone.
‘Grexit’ should propel gold higher with respected analysts saying gold could quickly rise to $2,000 per ounce should a ‘Grexit’ occur.
The Greek and EU debt ‘can’ has been continuously kicked down the road. We are running out of road …
“A must read for depositors globally seeking to protect their bank deposits from bail-ins”:
Protecting Your Savings in the Coming Bail-In Era
MARKET UPDATE
Today’s AM fix was USD 1,181.40, EUR 1,086.15 and GBP 791.77 per ounce.
Friday’s AM fix was USD 1,171.75, EUR 1,096.17 and GBP 794.73 per ounce.
Silver in U.S. Dollars – 1 Week
Gold and silver were both strong for the week – gold rose 2.42 percent and silver surged 7.45 percent.
Gold climbed 1.1 percent or $12.90 and closed at $1,183.20 an ounce Friday, while silver surged 3.72 percent or $0.60 at $16.73 an ounce.
In Singapore, bullion for immediate delivery in afternoon trading was $1,181.71 an ounce. Gold remained steady not moving much since the close on Friday.
In London spot gold in the late morning is trading at $1,181.66 or down 0.03 percent. Silver is at $16.70 or off 0.20 percent and platinum is at $1,138.09 or up 0.10 percent.
Premiums on the Shanghai Gold Exchange (SGE) have fallen $2 to $4-$5 today compared with $6-$7 on Friday. This suggests that gold demand in China eased after the gains last week. However, Chinese gold demand remains very robust as seen in the 51.5 metric tonnes of gold withdrawals on the SGE last week.
European markets today are cautious due to concerns regarding Greece, ahead of a meeting between its prime minister and Germany’s Angela Merkel.
In Europe, Greek Prime Minister Alexis Tsipras is meeting with German Chancellor Angela Merkel today. Greece is running out of cash quickly which is heightening the risk of a ‘Grexit’ and a return to the drachma, or alternatively to Cyprus style bail-ins.
Open Europe a research group estimated a ‘Brexit’ or Britain leaving the European Union could cost Britain 56 billion pounds ($84 billion) a year by 2030 unless the country keeps its borders open, based on a departure by January 2018.
Bullion coin demand remains robust as seen in the latest data from the U.S. Mint. Sales of gold American Eagle coins by the U.S. Mint have already out sold last March’s total by well over 50% this month, reaching 34,500 ounces with another week of the month left to go according to Reuters. In March 2014 as a whole, they reached 21,000 ounces.
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Anyone with two braincells rattling around inside their skull should be seriously limiting their exposure to the banking ponzi.
Suffer the fools too slow and blind to see it coming.
Goldcore's formula:
Gold price goes up=post an article.
Gold price goes down=silence.
So let me see if I understand this. They wait until all the rich remove their money, then they take the money of those who have little, and that's going to fix things? I know i'm naive, but seriously. ???
"...then they take the money of those who have little, and that's going to fix things?..."
Well, it's not designed to fix ANYTHING. It's merely designed to take the easy money of those that are powerless to prevent it from being taken away - "Like stealing candy from a baby"
The rich don't remove their money - they never put it in Greek banks to begin with. Those things aren't safe!
and KD-X, you're proving your handle if you don't know that goldman sucks was behind Greec's fooling the EU and hiding their much smaller debt at the time and into accepting them into their foolish fold.
And it doesn't matter who did what, the final outcome is all that matters. You can blame anyone you wish but it won't change a thing......
its not surprising that goldcore woud relate all this to an increase in the POG (from their lips...) but for any financial commenter that is actually paid for a living to stupidly omit the elephant in the room, Russia, backed financially by the mastodon, China, stepping in to save the Greeks at the last moment (and ending up with a nice Warm Water Mediteranean naval port, thank you very much) is not only the height of unbelievable stupidity but borders on criminal mischief because nobody can be that stupid.
"nobody can be that stupid."
Wanna bet? Remember, this series of events is being orchestrated by Eurocretins - politicians and Patrician bureaucrats.
1. Greece is out of cash, stealing from pension and trust funds to meet payments. The Greeks are being denied access to bond markets so they cannot roll over their debts - in other words, the Greece is already so far under water that it cannot make interest payments except by taking on more debt;
2. Greeks are rushing to withdraw all they can from Greek banks, and the Greek banks are surviving day to day on cash infusions from the EU emergency liquidity facility;
3. Germany leads the crowd of EU finance ministers demanding a complete surrender by Tsipras and Varoufakis to the Troika program of "reforms" and continued Extend and Pretend, or else the Troika will refuse to provide any more cash to meet the runs on Greek banks;
4. The 2010 and 2012 "bail-outs" and imposed austerity have not improved Greece's economy or budgetary situation - Greece is mired deep in depression with reduced GDP and increasing debt. If Greece agrees to continue with the Troika's "reforms" program, Greece will be kept on a drip feed of more loans, while its people and economy continue to struggle and its debt level increases;
5. If Greece does not agree to the Troika demands, Greece will have an immediate liquidity crisis and seems destined to default on its debts;
6. If Tsipras and Varoufakis fold to Troika pressure, they will face an immediate political crisis in Greece, and their government may fall, leaving an uncertain political direction for Greece. Greece might re-elect Samaras and his right-wing government, or might take a more chaotic path via extreme left or right wing political parties. Political calm is not in the cards;
7. If Greece defaults, it seems likely to cause a meltdown of the Euro system and a cascade of derivative defaults.
8. Germany can defuse the Greek crisis by leading a move to easing Greece's austerity rules, giving Tsipras and Varoufakis some face-saving cover and getting them to agree to Extend and Pretend. This would kick the can down the road for a while;
9. The German government, EU finance ministers, and the governing politicians in Spain and Portugal fear that any easing of Greece's austerity rules would be unpopular with their voting constituencies and would encourage anti-austerity parties in other PIIGS nations to demand similar or more easing of their austerity programs;
10. While Greece's requests for easing of austerity rules are being met with loud denunciation by Germany and EU finance ministers, Italy and France are being granted relief from budget-deficit restraints under their austerity programs;
11. The hard line being taken against Greece risks blowing up the entire Euro project and the current Euro financial house of cards. Germany expects the PIIGS to accept austerity, falling GDP and falling prosperity, while Germany enjoys its trade and financial surpluses. The EU is rapidly morphing into Greater Germany, with Germany as the economic center and the periphery as the provinces of the new German Empire.
The political interests of individual politicians are trumping the broader interests of the EU and Eurozone. The argument has devolved into a Merkel/Schaeuble need to maintain a posture of austerity vs. the Syriza's political need to obtain a loosening of the austerity rules while remaining in the EU and Eurozone.
The recent Greek election gave Syriza a mandate to demand adjustment of the austerity rules, but not to take Greece out of the EU or Eurozone. Merkel and Schaeuble may be engineering the Euro/EU exit of Greece for Syriza.
Where do you guys find this stuff? In the Ridiculous Fantasy aisle at B&N?
I hear Mongolia is interested in a naval base at the Piraeus as well. Maybe it will become a bidders war between them and Bolivia.
Socialist utopia and a command economy, what could possibly go wrong. CB's around the world are attempting control the world economy, too bad the real world doesn't run on position papers and rosy scenario's. Things are getting worse everywhere but they have a plan.......
Syriza really cleaned house, now the theater can move to Spain where Podemos will do the same. Silly goyim!
Nazis are goyim too, you know.
Podemos finished third in the recent elections. They were counting on Syriza making a bigger splash. Their fates were tied together.