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With Greece "Nowhere Close" To Deal, Depositors Pull €300 Million From Banks In Single Day
On Tuesday, Greece postponed a scheduled Eurogroup meeting in Brussels without offering a reason as officials conducted “preparatory” discussions and held an evening teleconference with creditors. Face-to-face meetings will take place today with just 9 days to go until June 5 when Athens will miss a payment to the IMF, triggering an unprecedented default the repercussions of which no one can accurately predict.
Also on Tuesday, Greek FinMin Yanis Varoufakis allegedly told Greek reporters that one measure under consideration to help stem the outflow of deposits from Greek banks was a levy on ATM withdrawals designed to encourage the use of credit cards over cash, a rather ironic suggestion coming from a government crippled by debt. The Finance Ministry was quick to deny that such a levy was being considered because after all, one way to ensure that ATM lines will get quite a bit longer is to suggest that depositors will soon be subject to a levy on withdrawals. Unfortunately, it appears as though the move to dispel the ATM tax “rumor” came too late because according to Kathimerini, deposit flight accelerated meaningfully on Tuesday. Here’s more:
Statements suggesting the imposition of capital control measures over the upcoming long weekend, and Tuesday’s reference by the Finance Ministry to the possible imposition of a levy on cash machine withdrawals – later withdrawn – sent many to the ATM. At the same time, bank officials point to widespread concerns about the possibility of a rift between Greece and its creditors over the government’s failure to repay a scheduled installment to the International Monetary Fund next week.
Credit sector professionals reported that deposit outflows on Tuesday alone came to 300 million euros, against about 100 million euros per day in recent days. They said that while this amount is quite high, the situation is under control as citizens are remaining calm on the positive messages from Greek officials.
On Wednesday the ECB board is expected to decide on a fresh extension of the ELA mechanism following the addition of another 200 million euros last week to a total of 80.2 billion euros. Although pressure by certain ECB council members for a tougher stance toward Greece has grown, sources agree that the ECB will probably avoid making any decisions that could trigger any major developments.
Or perhaps not, because as it turns out, the ECB did not in fact raise the cap on the emergency liquidity lifeline that’s keeping the Greek banking sector afloat, opting instead to keep the ceiling unchanged at €80.2 billion which leaves banks with about €3 billion in remaining liquidity.
Ironically, the ECB cited “very limited deposit withdrawals over past week” as the reason for its decision suggesting that either Greek bank officials are lying about the severity of the outflow or Mario Draghi is deliberately tightening the screws in an effort to help creditors extract concessions from PM Alexis Tsipras. The prevailing assumption had been that the central bank would continue to incrementally raise the ELA cap (the average weekly increase had been around €1.5 billion before last week’s €200 million hike) until Greek banks exhausted their available collateral, said to amount to around an additional €13 billion. That would have allowed banks to offset deposit outflows through the end of July. Now, that assumption looks to be questionable. As a reminder, here’s what the cash situation looks like:
Meanwhile, some officials have now thrown in the towel, with Bloomberg reporting that a deal will not be reached by the end of this month as Greece is “nowhere close” to striking a compromise that’s acceptable to the IMF and the EU:
- GREECE SAID LIKELY TO MISS MAY DEAL DEADLINE AS TALKS STALL
- GREECE SAID TO BE NOWHERE CLOSE TO AGREEMENT WITH CREDITORS
This will come as no surprise to regular readers who will recall that the IMF and the European Commission are now keen to send a strong message in terms of granting no concessions in talks with Greece after anti-austerity parties staged an electoral coup in Spain in Sunday's regional and municipal vote. By making an example of Greece, the troika can effectively discourage other democratically elected governments from pursuing similar mandates and indeed, we're now seeing commentary that suggests giving in to Greece's demands would be worse than Grexit.
Via Bloomberg (note that this is a Portuguese daily interviewing a German official):
The risk of contagion from Greece exiting the euro area is smaller than it was a few years ago, Christoph Schmidt, head of the German government’s council of economic advisers, is cited as saying in an interview done last week with Diario Economico.
Fearing a Greek exit to the point of accepting all the conditions that the Greek government demands would be a lot worse than an exit, paper cites Schmidt as saying.
And BlackRock has a similar message to the Greeks:
A Greek exit from the euro area is less disastrous than making concessions, Het Financieele Dagblad reports citing an interview with BlackRock CEO Larry Fink.
Says that if concessions are made, other countries may also demand them.
As an investor, he would be reassured by a decisive Europe.
Says it’s unacceptable Alexis Tsipras wants to reverse earlier agreements on reforms.
It's now abundantly clear that the IMF, Brussels, and Berlin will accept nothing less than a wholesale abandonment of Syriza's anti-austerity platform if Tsipras intends to walk away with a deal. Short of that, Syriza will be left to fight for their political life amid what will surely be a catastrophic economic collapse should the country be forced to revert to a parallel currency.
Either way, Greece's creditors will have achieved their goal of using financial leverage to suppress the anti-austerity germ — for now.
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Greeks should show their European Solidarity and keep their funds in the banks, for the good of the project. That way, if there has to be a bailin, the Greek Banks have access to as much capital as necessary. Bad showing on the Greek's part for putting their own welfare ahead of Brussels. Clearly the Greeks don'T appreciate the peace and prosperity the EU and the EURO have brought Europe.
S/he who panics first panics best.
@ Haus...are you Ghordo baiting with your sarc ;-)
300 MM seems tiny for a whole nation though. And I wonder what Greek gold sales look like in 2015...
@ O R I
I would be buying silver.
There pulling out €..............Euro value has only one way to go long tern and it ain't up
Oh totally XAG, I'm a serious AG proponent myself, but most people are still running after AU.
My holding ratio is 7% AU, 93% AG...
O R I
50/50 getting ready to go 100 AU
Then wait and go 100 AG etc etc etc
Abandon Ship!
You know if ZH reduced the font size a little more I think they could squeeze another 3 or 4 banner ads on the page .....
@ Stackers
Get adblock
Best thing I ever did for surfing the internet!
Oh regional Indian,
You must be mistaken. I would never be sarcastic with the future of Europe & the European Union at stake. These Greeks need to stiffen up the upper lip. Surely they must realise that the only thing, literally the only thing keeping peace and ensuring eternal prosperity on the continent is the European Union and the European Monetary Union. It is part of being European now. Sometimes, some nations have to "take one on the chin" for the good of the project. It is Greece's time now. I fear for my life, the life of my friends and family should the European Union cease to exist, and given the way the Greeks are handling the situation, not only are they undermining what Europe and being European stands for, but they put everyone's safety at risk.
Interesting Haus.
First off, the greeks are not handling anything. Nothing. They are the football being kicked around.
Look at the players on their neck...IMF, EU, ECB, Germany, Bundesbank....all of whom gave them too much, where any body with a functioning brain cell could look 3-4-5 years ahead and knwo how this would end.
+, the EU is clearly a mega metastasized cancer of an organization, why not leave when you can. That is what self-preservation demands.
You want the greeks to behave themselves for you and yours?
Not very libertarian or even sensible to make that request, is it?
This is where they were in early 2012, sinking to their knees...
They SHOUDL exit, but will not be allowed, that is the reality...
I fucking hate the EUR and EU and everything they stand for. I was just trying to moonlight as MDB.
He is better at it than I am.
Well, you almoooost had me. Glad we are on the same page!
You did all right though, dead pan delivery and good points.....
This was Greece in 2012, already down....this is 3 years on....
https://aadivaahan.wordpress.com/2012/02/28/roiling-world-righteous-indi...
H-T, you were formerly known as "Million Dollar Bonus". Isn't that right?
I am so sick of this Greek nonsense I have thought this might be a way to spice it up. Setup another account.
I'm taking user name ideas.
Reminds me of a basketball game with 00:00:45 sec left that takes 30 min to end.
Presently the Greeks are taking free throws on the ECB's dime. Wait until the ECB tries to collect the 'collateral' backing the 'loans' securing the cash withdrawals. Any Greek citizen who still has money in the bank soon won't.
Collect the ...
Collateral???? ROFLMAO.
Take my...
Money??? I can't hold myself. LOLOLOLOLOLOLOLOL
Out of Greek ...
Banks? What banks???? HAHAHAHAHAHAHA
On a serious note, we have busted the myth of fractional reserve banking. We have taken out more than 45% of the deposits (counting since 2008) and the ATMs still spit money (they have started offering 20-notes instead of 50-notes lately, but no worries).
ELA you said? What ELA? ELA means "come here", "come over" in Greek. The modern language version of Leonidas message.
+1. Actually, on a lesser note, this exchange here is imho very iconic. Cognitive Dissonance looks at the matter in a way that does not apply to the eurozone in general and Greece in particular
and a lot of that has to do with banks. not only them, but beginning with them
note skistroni's "Banks? What banks???? HAHAHAHAHAHAHA". Poor Cog might not understand why, and I am at loss about how to explain, or where to start
I thought putting certain words in ' ' marks would highlight the farce and my view of the mainstream thinking. Clearly I need to begin labeling my sarc as /sarc
I shall do better next time. /sarc
I am fully aware of that, I just found it to be a good opportunity to crack a laugh at it, we need it these days.
I was talking to Ghordius. It was clear you heard my /sarc. ;-)
Greek govt and most journo reports say Greek central bank didn't request ELA extension and that the ELA 'cushion' is still at 3 bn, which means it still is at the level it's been since February. What you see is a last ditch attempt by Schaeuble and others to create a bank run, plain and simple. Doesn't seem to be happening. ZH posters tend to wish for a default so this is no surprise.
That said, Greeks should've kept their money in the banks since Dec 2014. That'd be a real show of solidarity for their new government. Didn't happen.
I can't believe there was 300 million left in the banks.
There was €300m in the Greek banking system on Monday? WHY??? For the love of God, who still had their cash in a Greek bank?
Gartman
It's called full faith and credit, once withdrawn, it can now be more easily stolen by a group of democrates.
Meanwhile the yen continues to hyperinflate agains the dollar. Nikkei also hyperinflating.
Dr. Krugman must be proud of that
"It's now abundantly clear that the IMF, Brussels, and Berlin will accept nothing less than a wholesale abandonment of Syriza's anti-austerity platform if Tsipras intends to walk away with a deal. Short of that, Syriza will be left to fight for their political life amid what will surely be a catastrophic economic collapse should the country be forced to revert to a parallel currency.
Either way, Greece's creditors will have achieved their goal of using financial leverage to suppress the anti-austerity germ — for now."
full of pathos, this article, particularly this part
first, Greece is still a signatory of the EU Fiscal Compact. This alone means that, as long the current Greek Parliament does not exit this treaty, it's committed to balanced budgets and even to a reduction of sovereign debt, in the long run
second, Syriza fighting for it's political life is an Greek political affair
third, this "bank run" is private citizens and companies taking their money off the Greek banks. perhaps having a Marxist at the Finance Ministry might have an influence, too
balanced budgets
At least you still have a sense of humor, Ghordo.
well, I'm not an ultra-liberal nor a US Libertarian nor an anarchist
I'm just a citizen and an entrepreneur that had always and still have to pay plenty of taxes, in several EU countries, including Greece
I have only a simple demand: if you tax me... use that money and not moar. I'm not alone in this. If this is not radical enough, well, there it is
No one minds a little theft, as long as it is other people's money. When they believe government is stealing for their benefit, their "confidence" will remain in place. When they realize that the power that can seize other people's money can do the same to theirs, all "confidence" is lost.
Digital currency is their last ditch. Timing is seldom just right and they are racing with building a positive perception of the abandonment of paper currency while trying to hold onto the banks with the other. The question is whether they can wait for public perception to catch up with THEIR reality. Everything is perception and their goal always has been to be able to control us without making us feel controlled. I don't think that is going to last. Things are changing too fast. It will come down to force, transparent tyranny and oppression....always for our own good of course.
When the carrot fails there is always plenty of stick.
You are full of shit.
Is that the same treaty that others have signed and shit on every day.
Yes?
That's what I thought.
France is "shitting" on it. period. and only a very little bit. call it... farting gently on it. it's a marathon, not a sprint
back to basics,
This treaty is the basis for this grand "European" expirment. The rules and powers given to the various institutions were willingly given up by contracting member states. Given that the European Union and the European Monetary Union in conjunction with the European Central Bank hold stead-fast to their treaty committments and limitations (e.g., TFEU 123) -- so should the Greek people.
It is a transparent, democratic institution. Should the Greeks decide they want to leave, then they can, and there is even a mechanism in the Lisabon Treaty. All that would be required for the Greeks to leave the European Union & Euro is unanimous consent by their partner member states.
Given that the European Union is here to secure peace and prosperity for the continent, and the democratic will of the people reigns supreme, should the Greeks decide to leave, I am sure the European Union and its member states would oblige them.
As a shining example of how much the European Union respects democracy, I point you to the referendums held by France & the Netherlands in 2005. Both nations (regrettably) decided against a European Constitution, and the European Constitution was dropped from that point forward. The European Constitution never existed, just because two nations out of more than 20 said "no." If that isn't democracy -- I don't know what is.
The last excellent example is the Irish referendum a few years back. The Irish voted that they did not want something, and the European Union, via the democratically elected Commission and Parliment showed the Irish how democracy works, but allowing them to vote not once -- BUT TWICE!
Real democracy in action.
"I point you to the referendums held by France & the Netherlands in 2005. Both nations (regrettably) decided against a European Constitution, and the European Constitution was dropped from that point forward."
if you mix sarcasm with facts, you don't make it easier to understand you.
first, were you for or against an "EU Constitution"? why? Personally, I was dead against it. I prefer... treaties
second, the Irish voted twice on a similar matter. what does count, the first or the second time? nevertheless, isn't that an Irish Affair?
third, what has all this to do with the EU Fiscal Compact? Actually, what has your treatise about experiments and transparency and so on to do with the mechanism of treaties?
it always comes back to this, eh? Treaties. For some, a swear word for itself
it's simple. that treaty was ratified by the Greek Parliament on May 10th, 2012, with 194 Yes versus 59 No. It has the power of Greek Law, being made with the same legislative procedure
now, tell me this Greek Parliament is going to rescind that
Ghordo,
Thank you for your thought provoking & insightful response.
How could anyone have been against the EU Constitution? Never before has there been a group of people like the Europeans. So similar in almost all things -- its hard to see a difference between them to the astute student of sociology, much less to the lay-political observer. Its sad its taken such a long time to unite a single group of people under one flag, one anthem, and soon, we can all hope, one army and one Olympic Team. What a day that will be, when the European Olympic team enters the stadium, everyoen carrying the blue & gold -- with thousands of people standing up, hand over their heart, tears in their eyes, singing as loud as they kann "Alle Menschen werden Brüder!" Can you see it!? I can. My heart just flutters with patriotic envy.
It really is amazing how people are against the uniting of Europeans. The benefits of United Europe far outweigh any petty difficulties that come along the way. Soon, with any luck, we can start massaging out the small differences that exist between my brothers and sisters all across this proud continent. We shall first eliminate all different languages and create a new language, which will be predominatly a mixture of English and Arabic. This new nation needs its own language. Given the greatness of a United Europe, I predict it will overtake English as the world's language in short order. Then we can eliminate other differences, like the way people spend money -- that barbarous relic. I think it would be best done by eliminating cash, and confiscating all Gold and Silver. Once we can get everyone to spend money identically, and speak identically, then we can start racially intermixing the Europeans into one grand Euoprean Race. We will be the envy of the world.
To honor the founders of this great project, all confiscated Gold and Silver will be melted down, and turned into 300 meter solid gold statues of Herman van Rompuy, Martin Schultz, and Mario Draghi. Because in this great citivilization we are building, together, hand in hand, there will be no poverty. Everyone will be wealthy.
It will be a glorious day.
have a look at Switzerland, before you go all sarcastic with something that does matter to me
twenty-something states, confederated, four frigging languages, no federal police
no, I was against an EU Constitution because I do not want a federal superstate. which is not what we have, at the moment
meanwhile... you shit all over the very concept of treaties among sovereigns, a habit you brought with you from somewhere else, for completely different historical reasons
we have lots of treaties. some of them, for an org called EU, others for an org called EuroSystem. two clubs of sovereigns, which you claim to hate, but for some reasons refuse to look at what they are, and prefer to believe and sometimes even parrot the propaganda of our federalists
meanwhile, it was in the US that gold was banned between 1934 and 1974, so don't put the "barbarous relic" in the field
meanwhile, it's still in the eurozone that the use of physical banknotes is one of the highest of the planet
and don't bring race into it before you have a solid knowledge of the various ancestral tribes that compose even Germany, or France, or Italy. which you haven't
superstate? thanks, but no, thanks. treaties? yes, thanks
>>>
...have a look at Switzerland...
<<<
Switzerland operates with a level of democracy that most states do not get close to, and to which the EU itself is on another planet.
For example, if a modest number of EU citizens could force a referendum (per Switzerland), do you think:
1. Greece would still be an EU-member?
Or even
2. Would the 'leader' be Herman von Rumpoy?
Watson
agreed, but that was not my point. it still has four languages and no federal police
further... Greece would, as far the eye can see without a referendum, vote for the EU and the EUR... and this is still a Greeek Affair if they do a referendum or not
and btw Herman is no "leader of the EU" anymore
Dutch democracy is where you can vote NO (60%) and a year later you are in the EU.
Ahem... what about the part with enforceable treaties.
You know, treaty terms can and will be violated - now what?
Should be a good test of their capital controls. Lets just watch and see how desperate they will become.
Not that it matters, for everyone will simply see it as the exception and not the rule.
Anybody got a cigarette?
You'll drown in debt trying to quit um.
I'm saving my cigarettes - we might all be using them as currency before this is over.
I don't understand all the Greek threads. THEY HAVE NO MONEY, end of story.
@ roadhazard
I don't understand all the Greek threads. THEY HAVE NO MONEY, end of story.
That's right.............only debt...........same as most weastern countries.....................just DEBT!!
yes, that's what I said. Now, why all the threads. It's the same story in every one.
Jack Lew has already made a couple of calls to Varofakis.
I think we may all be Greeks in June.
At least our Grandkids will.
I'm still busy paying for Vietnam.
Where are all these greek euros supposedly coming from? 8000 euros per person in actual physical cash. The country could easily go physical cash only with absolutly no need for banks at all.
most of the country is famous for "going easily on physical cash". one of the reasons why Greeks like the EUR... particularly in form of banknotes in their pockets
in fact, Greece could, if certain things go in certain ways, expose the whole "need" for banks as a mostly exxagerated claim... by bankers
Well I guess we should all just feel glad that even a report of what's going on here has come out and leave it at that.
( US Government ) " We must have Capital controls now here in the States, the um Turrorists are umm in your umm back yard, and want your umm guns and umm children ...Trust umm us.
Wahey!! Lootlympic is coming soon.
Greece is trying to protect its bank's deposits, they're just not very good at it. Still the "War on Cash" is ramping up everywhere, including Greece...
http://www.globaldeflationnews.com/more-proof-that-central-banks-have-de...
someone leaked the info
insiders are fleeing
$300 Million a day is not fast enough.
Greek depositors need to get total Greek bank deposits below the level of total debt 'owed' in order to get the upper hand. Troika will try to freeze the bank deposits shortly in a desperate attempt to confiscate and claw back 100% of debt, no haircut. Heard it on the street, Greeks need to set the example for the EU by hanging extremist bankers.
Just pretend that any Greek holding cash is a DRUG DEALER...that shit works great here in 'Murica!
THere is too much misinformation out there right now coming from all sides regarding the "talks"....we won't know the truth until the very end.
I hope the current system erodes and implodes....we need to build a newer one from its ashes. Screw the ruling class....screw em all!
We have already established that deposits are nothing more than a 'liability' to today's modern banks. So it must be a good thing the Greek banks will no longer have this liability to worry about. That will mean the Greek banks can be freed up to do what modern banks do - borrow free central bank money and speculate on derivatives, London real estate, commodities, and highly leveraged futures.
Talk about a 'straitjacket'!
I'd suspect if the Elites & Bankers who got them here were to suddenly be hanging from lampposts ( most probably unlit ) it might give the Greeks something to rally around.
It is very unusual to be part of this Huge Community and not have ANY friends in your corner.
Probably everyone is looking over their own shoulder which is a Big Tell that there is no love lost in this Corrupt Elitist Union.
Pivot East MotherFuckers.
If you HATE all the advertising, banners, etc - get AdBlock Plus - I have Firefox and got the AdBlock Plus from Mozilla add-ons (all free by the way). Terrific job!
Greeks are 10 million
a 300 million in widrawls means 30 euros per person
c'mon... you doomongers have to get beter panic material than this.
I'm in portugal and today I widrew 400 euros, so what ?
How a greek politician can sit down at a table and negociate anything is beyond me....you have billions in loans...you do not want to pay...you want more loans to keep the sheeple happy...and you dont want to pay them off either....what kind of line is that????? dreamland...
I know what Greece is going to do because I read the story above this one that says Greece isn't going to default even though this one indicates that it will. Can't fool me.
It's so cute that they think they can control the outcome by putting their foot down...
In fact, whether they offer concessions to Greece or not, anti-austerity movements will continue to demand them, and continue to grow. The idea that they will shut all that opposition up by being hard-liners is laughable...
At this point it's only a question of how many concessions they will ultimately have to make. They can do it voluntarily and pretend they're still in control, or be forced to by the emergence of hard-right nationalist parties that will be elected by people sick of all the bullshit and suffering, but concessions WILL be made or taken. The debts will be written down or repudiated altogether.