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Greece Floats Surcharge On Withdrawals As ECB Considers Cuts To Liquidity Lifeline
As we first reported on Monday and as we outlined in more detail on Tuesday, the IMF and Greece’s EU creditors are now at odds over what constitutes an acceptable set of reforms. Although disagreements between the IMF and the rest of the Troika over Greece are not unprecedented, Syriza era negotiations have been largely characterized by the fractious relationship between Athens and its creditors, with Greek FinMin Yanis Varoufakis personifying the tension. With Varoufakis now sidelined, talks looked set to move forward but have now stalled amid what some officials have described as intractable differences between the “red lines” adopted by the IMF and the supposedly more lenient terms favored by the EU. This is further complicated by reports that the IMF is pushing for the EU to write-off a portion of its Greek debt. In the end, it’s no longer clear who’s the ‘good cop’ and who’s the ‘bad cop.’
Today’s news flow out of Greece starts with what look like more ‘soft’ capital controls as Athens is considering the imposition of a surcharge on withdrawals and transfers and is also mulling a ‘ceiling’ on the latter.
Via DailyMail:
Greece has revealed it is to introduce a surcharge for all cashpoint withdrawals and financial transactions in a desperate attempt to prevent citizens withdrawing their money from the country's beleaguered banks.
Ministers hope the controversial move could raise as much as €180 million, which the Athens government hopes will help the country avoid defaulting on debts owed to international creditors…
Clarifying that the charge will not apply to money paid in to a bank account, a senior finance ministry official told The Times: 'The surcharge is just one of a grab-bag of measures we are considering if things get tough.'
The official added that Greece is also considering a ceiling on bank transfers over €1 million in what could fire the starting pistol for capital controls if Greece does go bust over the coming months.
Meanwhile, Athens reportedly managed to scrape together enough cash to make a €200 million payment to the IMF today, but the real test comes on Monday when Greece must come up with more than €700 million to meet its obligations.
Additionally, the ECB will reportedly discuss increasing the haircut on collateral pledged by Greek banks for ELA, a move which could intensify the cash crunch and tighten the screws on the banking sector ahead of Monday’s do-or-die IMF payment. Here’s Bloomberg:
European Central Bank officials will debate tighter rules for the liquidity that Greek lenders rely on for survival, two people familiar with the matter said, a move that underscores the fragility of the country’s financial system.
The Governing Council will discuss Wednesday whether to raise discounts on the collateral Greek banks pledge in exchange for emergency funding, said the people, who are familiar with the agenda and asked not to be identified. Governors will also review how much more Emergency Liquidity Assistance to offer Greek banks.
With access to capital markets shut and deposits flowing out of their vaults, Greek banks depend on ELA to stay afloat. While economists say the ECB is unlikely to demand higher haircuts without a green light from Europe’s politicians, the debate shows how concerned some central bankers are about Greece’s solvency 100 days after Prime Minister Alexis Tsipras came to power.
And a bit more color:
ECB is reviewing provisions for Emergency Liquidity Assistance for Greek banks today, Goldman Sachs says.
ECB has raised ELA cap on 12 occasions
Today’s review may be in spotlight for several reasons: ELA balance can be used to track deposit flows, and may signal that these re-accelerated in recent weeks; ELA collateral may be at risk from haircut revisions.
Collateral has been ample so far, ECB may eventually tighten ELA provision, has option to increase discount for Greek sovereign exposure from ~23% now to 44%, 65% or even 80%.
Of course no update on Greece's descent into complete insolvency would be complete without a Schaeuble reality check:
WWII while reparations calls are “nonsense”: Schaeuble
Reparations “false topic” to raise in discussion: Schaeuble
Schaeuble says Greece has failed to get Russian financial aid
Speaking of reality, we'll close with the following statistics which, while billed as a slight 'improvement', underscore the dire economic situation Greeks are forced to confront on a daily basis:
Greece’s unemployment rate in Feb. dropped to 25.4% from a revised 25.6% in the previous month, according to e-mailed statement from the Athens-based Hellenic StatisticalAuthority. Est. 25.6% from 4 economists surveyed. Unemployment rate for Greeks aged 15-24 at 50.1% in Feb. Overall female jobless rate 29.1% vs 22.4% for men.
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It's your money
Just dont ask for it
When breaking up with your girlfriend it's often best to do so at a crowded restaurant.
It's not you, it's me. Hope we can still be friends. Blah, blah, blah.... Chuck a $20 on the table, tell her to enjoy the rest of her lunch, you've got a meeting in a few minutes across town and get the hell outta there. Done.
Damn it Jim, I'm a doctor, not an ECB banker.
How many times do you want me to bring that dead guy back to life?
Coming soon to financial markets and in financial transactions near you.
The Greeks have turned into the cash checking place rather quickly. What makes you think the Italians aren't next? Then the Protugese, Spanish, French even? And when it comes to my locality, it will be more like the payday loan places or the Mob than it will be the check cashing places...
Let's just bring it already. The sooner we rip the Band-Aid off, the sooner the pain can get over.
Does that mean that all Greek bank customers are wearing "red shirts"?
Has the fat lady sung yet? It aint over till she sings.
Did he really admit that they have a "grab-bag?"
Is that grab-bag, grab-ass, or gang-bang? Transliteration from Greek isn't easy.
My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... www.jobs-review.com
donate your paycheck to the poor serfs of Greece. STFU
Sounds like you're whoring.
And your sis is doing ... what? Bot.
I can't blieve there would be any Greeks with any money in a bank at this point.
the 1 million euro ceiling is the bomb...
Banks don't need our money. they can just print...
Since journalists don’t do their work anymore I now have two lists???
LIST I
08 May 2015 €1,400 million Greek T-Bill redemption
11 May 2015 Eurogroup meeting (final deadline for reforms)
12 May 2015 €0,763 million IMF
15 May 2015 €1,400 million Greece T-Bill redemption
31 May 2015 €2,500 million Greek pensions/wages bill
05 June 2015 €0,312 million IMF
12 June 2015 €3,600 Greek T-Bill redemption
12 June 2015 €0,351 million IMF
16 June 2015 €0,576 million IMF
18 June 2015 Eurogroup meeting
25 June 2015 EU leaders summit
30 June 2015 €2,900 million IMF
12 July 2015 €2,400 million in Greek bills matures
20 July 2015 €3,500 million ECB Maturity Gov't Bonds
20 Aug 2015 €3,200 million ECB Maturity Gov't Bonds
Source: https://pbs.twimg.com/media/CETnPt7WIAAAlTV.jpg
LIST II
11 May 2015 Last change to release €7,000 million/€7 billion from ECB
12 May 2015 €0,774 million IMF
05 June 2015 €0,310 million IMF
12 June 2015 €0,348 million IMF
16 June 2015 €0,581 million IMF
19 June 2015 €0,348 million IMF
30 June 2015 A four-month extension on bailout agreement expires.
13 July 2015 €0,465 million IMF
19 July 2015 €0,199 million ECB Maturity Gov't Bonds
19 July 2015 €0,104 million ECB Maturity Gov't Bonds
20 July 2015 €3,500 million ECB Maturity Gov't Bonds
Source: http://www.bloomberg.com/news/articles/2015-04-23/greece-s-scary-calendar-of-debt-payments-due
Since journalists don’t do their work anymore I now have two lists???
What the hell is a journalist?
A journalist is one who promotes their own political viewpoint and agenda, so others can be better informed. If there is no news, you create it. They have no backbone or individual thought process of their own. You ask no difficult questions of your political friends, you spend all your time researching the opposition.
"What the hell is a journalist?"
Noun. A scribe for power. One who transcribes power's utterances into well formed propaganda.
Liberty is a demand. Tyranny is submission.
Wont it be interesting to watch how the IMF, EU, ECB socialists deal with the socialist utopia that just voted in the farthest left government they have ever had....this is the slowest train wreck in history.
the can needs serveral kicks to go anywhere. someone kick it square and make it move beyond a step...
I keep saying that they are about to kick that can squarely into the house of cards they have constructed...and then the fun really begins.
OT, but not that much. I see that the MSM is not reporting much on the newest tax initiative from the Greek government: to tax the 400 wealthiest families of the Republic
Surprise!!
The raiding of the common peoples pension funds happened overnight. We will see if the talk of taxing the rich ever occurs or if it is just more theater to keep the sheep from protesting. There has been previous talk of going after the largest tax evaders with no results but it is the policies to take money from the common people that actually get implimented.
Money talks and bullshit walks. YOu hit it on the head. They will "promise" to tax the rich after they have taken everything from the poor and "middle class". Taxing the rich is how you get the army to step in.
"to tax the 400 wealthiest families of the Republic"
Yes, but as always with Greece there's a catch. In this case the taxation rate is 0%.
I imagine a world one day in which the moron people have been so screwed over by banks that they finally get smart and stop using them - hahahaha! I crack me up
at €1 per €1000 withdrawn, they would need to withdraw €180 billion to make their €180M target. That would be about €30,000 per adult greek withdrawn ... good fucking luck, Brussels.
Ehh the same money circulates through the economy a whole lot of times during a year. Every transaction gets the tax, after all.
Bitcoin user not affected
Eh.. not until the power or internet connection goes out. Or not until the guy in control of the exchange walks away with all the bitcoins.
The internet is unlikely to go down, maybe pockets.
Ever heard of cold storage? You don't need to store your Bitcoins on an online exchange, that's how dummies roll. Dummies get rolled. Take it offline, only go online when you transact. Bitcoin is awesome technology.
'unlikely"
When shit meets fan, it goes dark
>>> The internet is unlikely to go down, maybe pockets.
>>> Ever heard of cold storage?
Nothing is more certain than that the internet will go down. Just as soon as the powers that be decide they want it to go down.
This is why Russia was experimenting last year with an operational national TCP/UDP/IP network if disconnected from the internet. So that in the worst case of sabotage there will be a Russia/China only IP (Internet Protocol) network.
Yes, if you have bitcoins you must store them offline, on an SD chip or similar - with duplicate backups.
The internet is the biggest network in the world. Its good to hedge your bets and develop subset networks to fall back on just in case, as you mentioned with Russia/China. Every country should. It should go down to the micro level, - local mesh networks.....between friends. In that case, if the internet WAN fails, at least you have your local mesh network where you can share files. Then there is caching of webpages, - snapshots of webpages in time. You can take down servers, but proxies will spring up like viruses.
To take down the internet entirely would involve taking down all satellite infrastructure, ethernet cabling, wireless access points etc at the same time,unlikely...
In this scenario you need a very large amount of people that are interested in accepting your fiat for their commodity. The amount of people that will want gold and silver is going to be vastly superior to those that want bitcoins.
That only happens if you are stupid enough to leave your coins in an account at an instituion. Like when you leave your money in a Greek bank.
>>> Schaeuble says Greece has failed to get Russian financial aid
How can Greece have failed to get Russian financial aid when they have not even tried to get Russian financial aid?
Greece knows full well that there is no point in asking for Russian financial aid before default. It can only be offered after default.
Russia will make money available to pay soldiers, civil servants and pensioners, Russia will not make money available to pay government debts or save banks from failure.
The Greek TPTB likely had a figurative gun held to their heads and were told in no uncertain terms that they had best not pair up with Russia. My guess is that tryst is completely off the table upon pain of the hastening end of the Tsipras regime; with extreme prejudice.
I would bet on no To Russia With Love for Greece; but having been in and out of NBG with small profit made in the past two months, I am walking away from this table to see what else is in the casino.
No one here talks about the inevitable here: the moment New Democracy comes back to power. Here is some possible thinking:
(a) When New Democracy comes back to power, mass emigration of the young ensues, dwarfing the Irish Potato famine of the 1840s.
(b) This emigration suits New Democracy just fine...it wasn't their demographic anyways...
(c) Thirty to 40 years later, Greece has a population of about 425, with the ECB owning all of the assets after asset stripping is complete.
(d) Once the last Greek dies off, the ECB owns assets without any pesky voters, and opens up a tax haven within the EU to rival Singapore and Dubai. Land values instantly shoot up, and the young re-immigrate to the Former Republic of Greece, however, prior to this the ECB sets the voting age at 50 and up.
(e) Capital floods in, creating a European Singapore.
(f) ECB repeats this model in the former republics of Italy, Spain, and Portugal.
(g) The new model is more econmically efficient and investor friendly than the northern European states, so those countries (if not already depopulated) collapse; residents move to Southern Europe, since it is where all of the Germans and Brits wanted to live anyways.
(h) ECB repeats the model in Northern Europe, completing its takeover of Europe and the transition away from democracy for good.
Won't work in Northern Europe which will have been over-run by African and Muslim vibrants by then. And they won't put up with any of that kinda shite.
I am a simple guy -
Are the "choices" Greece has available to them down to -
1. Officially say - we default - we are not going to be making the payments that are due
2. Just don't make the payments that are due - but don't say anything about defaulting
It is the creditors who decide whether or not there is a default -
the creditors can say:
"You didn't pay so you are in default"
or
"You didn't pay but we are being lenient and extending the due date".
I would actually opine that the likely option is:
"You did not pay and we will therefore penalize you, perhaps by increasing ELA collateral requirements to around 1000% however we will of course not call it anything remotely like default so as not to trigger any derivatives contracts."
This is why it is critical that the Greeks announce that they are defaulting. Don't allow TPTB to manipulate the algos by avoiding the D" word.
Say it loud, say it clear, and give the algos NO DOUBT about what you are doing.
Charging for withdrawals and ATM cash is more chickenshit capital controls. They are going to do everything everywhere before long. If you do not have your money out of the system you are a fool. If you are Greek and still have money in the system your are brain dead.
I see breaking reports like this on other well known sites days before ZH now. Used to the the other way around. C'mon Tylers and ABC media, LTD.
That will definitely stop the bleed-out.
(i don't think I really need to add [sarc] tags to this)
When do "prolonged" talks turn into prolapsed?
Tobin Tax introduced in Greek Experiment
if we like your money...we can keep your money
You knew it was coming to this. Syriza is just as bogus as any other left wing party. Always put the heavy manners on the Sheeple
But Tsirpussy doesn't wear a tie and the guy from Spain, who will sell the working people down the river in the same many, has a ponytail. Punk rock!
So is this dipshit Tsipras going to default after he has given everything away? Where is the leverage in that. The Greeks are beyond pathetic. The only nation worthy of respect is Iceland
What kind of an idiot still has any money in any Greek bank?
Rhetorical question only.
Suspect most cash in banks now is of two sorts. Wages of public sector employees and large firms, plus pensions, paid through bank accounts and not fully withdrawn immediately; and working funds needed by businesses that can't practically transact in cash, e.g. importers and exporters, and large firms dealing with other firms or the government.
Not likely to be much "lazy" cash just sitting there waiting to be confiscated.
Any withdrawal charge on employees and pensioners becomes effectively a reduction in their wages/pension from the government, so expect them to get stroppy and demand an increase to offset the charge or an exemption.
Probably tougher for businesses that need bank facilities for funds transfer, so they become less profitable, cut back on some business, employ fewer people.
All round, another EU inspired masterstroke to get Greece back on its feet.