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Draghi Freezes Greek ELA, Varoufakis Tells BBC "Looking At Imposing Capital Controls, Closing Banks"
ith Greece having gone past the point of no return, things are now escalating very rapidly, and moments ago the BBC's Nikc Sutton tweeted that the BBC's Mark Mardell was told the Greek government will be "looking overnight at imposing capital controls and closing banks on Monday."
.@yanisvaroufakis tells @BBCMarkMardell: Greek Govt will be looking overnight at imposing capital controls & closing banks on Monday. #tw2
— Nick Sutton (@suttonnick) June 28, 2015
The context, of course, is bluffing until the very end, with Varoufakis claiming that if the ECB were to stop support for Greek banks, then Europe as we know it (or not) "has failed."
Greek finance minister @yanisvaroufakis tells #tw2 if ECB were to stop support for Greek banking system would mean that Europe had failed.
— Nick Sutton (@suttonnick) June 28, 2015
.@yanisvaroufakis "monetary union that cannot guarantee functioning banks…constitutes a major denial of the v principle of a monetary union"
— Nick Sutton (@suttonnick) June 28, 2015
The problem is that Greece would be, in the eyes of the ECB, no longer part of the monetary union and certainly won't be after June 30 if there is no "deal" so as Dijsellbloem said yesterday, it is the Greek government's problem - in other words, Europe thinks it has won the "blame game", and the loser is Greece while Greece is still desperate to make Europe seem the villain.
.@yanisvaroufakis: "It is a dark hour for Europe...Greece has had many dark hours in its very long history" #tw2 http://t.co/q935zI3PuC
— Nick Sutton (@suttonnick) June 28, 2015
The whole BBC interview can be heard here:
Listen live to @BBCMarkMardell's interview with @yanisvaroufakis on @BBCRadio4: http://t.co/q935zI3PuC #tw2 #Grexit pic.twitter.com/kvIL8tQQGx
— Nick Sutton (@suttonnick) June 28, 2015
And of course, in keeping with the diplomatic strategy of Greece, which has been to promptly deny everything it has just said, Varoufakis did just htat.
Capital controls within a monetary union are a contradiction in terms. The Greek government opposes the very concept.
— Yanis Varoufakis (@yanisvaroufakis) June 28, 2015
Reuters adds that on Sunday night the Greek government will consider imposing capital controls and closing the country's banks on Monday, Finance Minister Yanis Varoufakis said, while asserting the crisis did not mean Athens would have to leave the euro.
Varoufakis, asked if capital controls were now inevitable and if the banking system would be shut down on Monday, told BBC radio on Sunday: "This is a matter that we'll have to work overnight on with the appropriate authorities, both here in Greece and in Frankfurt."
Varoufakis said he would be holding talks with the Bank of Greece and the European Central Bank to see "what can be done to minimise the burden on our people from Europe's refusal to grant us basic democratic rights".
He said the crisis and a planned referendum did not mean Greece would necessarily have to leave the euro however, even if Greeks voted to reject the package being offered by creditors.
"It doesn't have to and it shouldn't," he said. "There are no provisions for leaving the euro once in. You can't get out. This is part of the European treaties. Why should we have to consider even getting out of the euro?"
But admit or deny, it no longer matters: moments ago the ECB announced it has frozen the Greek ELA at its Friday level even as the Greek bank run has claimed at least another €1 billion in deposits according to Skai TV reports (ahead of its formal pulling just after midnight on Tuesday when Greece is no longer in an official bailout program), and as such it is only a matter of time before the entire ELA bailout is unwound a la Cyprus in March 2013. From the ECB:
ELA to Greek banks maintained at its current level
- ECB takes note of decision on Greek referendum and the non-prolongation of the EU adjustment programme
- ECB will work closely with Bank of Greece to maintain financial stability
- Emergency liquidity assistance maintained at Friday’s (26 June 2015) level
- Governing Council stands ready to review decision
- Governing Council closely monitoring situation and potential implications for monetary policy stance
The Governing Council of the European Central Bank today welcomed the commitment by ministers from euro area Member States to take all necessary measures to further improve the resilience of euro area economies and to stand ready to take decisive steps to strengthen Economic and Monetary Union.
Following the decision by the Greek authorities to hold a referendum and the non-prolongation of the EU adjustment programme for Greece, the Governing Council declared it will work closely with the Bank of Greece to maintain financial stability.
Given the current circumstances, the Governing Council decided to maintain the ceiling to the provision of emergency liquidity assistance (ELA) to Greek banks at the level decided on Friday (26 June 2015).
The Governing Council stands ready to reconsider its decision.
Mario Draghi, ECB President, said: “We continue to work closely with the Bank of Greece and we strongly endorse the commitment of Member States in pledging to take action to address the fragilities of euro area economies.”
Yannis Stournaras, Governor of the Bank of Greece, said: “The Bank of Greece, as a member of the Eurosystem, will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”
The Governing Council is closely monitoring the situation in financial markets and the potential implications for the monetary policy stance and for the balance of risks to price stability in the euro area. The Governing Council is determined to use all the instruments available within its mandate.
End result (h/t @NectarAxais):
It's begun @zerohedge #Grexit pic.twitter.com/iAEo4poK9H
— Nectar Axais (@NectarAxais) June 28, 2015
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Youve got no idea mate.
"looking overnight at imposing capital controls and closing banks on Monday."
Capital Controls are not required when there is no money in the bank.
Right?
Interestingly, Paulo Batista, Executive Director at the IMF, representing 12 South American countries, is leaving on 30/6 to head up the BRICS Bank. This block voted against providing large bail-outs to Greece knowing that they would never be able to pay them back. South America has a lot of empathy for the Greek people -they have been screwed by the IMF many times themselves. This move tells me that the IMF is fracturing -it remains an Institution representing the interests of Western banking, and refuses to recognise that its role in the world is diminishing.
No longer can the West go on dictating terms to developing nations. The EU is in decline; it represents the old elitist one world government ideology. This is now failing, to be replaced by a multi polar approach which will benefit the people not just banks and corporations.
It tells me that the BRICS aren't completely stupid.
Let's see how the BRICS banks react to a dead beat borrower before we jump to any conclusions as to whether they grow a kinder gentler banker in those parts.
I suspect there's a dearth of choirboys in the banking community.
How about the US will pay the debt if the Greeks take Mary Jo White off our hands?
Socialist cannibalism. Bon Appetit, bitchez!
amazing political leaders in action. Europe should just go back to their kings and royality
If Russia and Greece merge .... think of all the synergy .... with their alphabets ?
Greece were dragged into the game with the help of GS, oh and yes the training of journalists by IMF ECB etc of how to lie to the people and sell them bullshit to the Greeks and all others how wonderful eveything is..
Ah, yes. Someone with a functioning memory.
C'mon.
Get real. EVERY country in the EMU cooked the books to meet the limits.
The banksters thought they were going to milk the cow but now they found out THEY got milked.
Good thing the ECB managed to dump the debt on the various taxpayers otherwise some bankers and bond specs might take it in the yassou.
Indeed.
There's a good reason you don't lend to un-credit-worthy borrowers...
Funny how everytime the banksters dream up some "new scheme" it blows up in their collective faces: Tech Wreck, Subprime Slime, Greece (and the like) in the EU to name a few.... and we get the fallout.
It doesn't blow up in their faces...
The smart money is in and out and the muppets end up holding the bag.
Muppets don't get bailouts.
Right. We get the fallouts.
Greece wasn't dragged into anything. It was considered of utmost importance by the Greeks to join the Eurozone. They frantically searched for ways to fudge the data, and exploited weaknesses in the European system caused by member states guarding their national sovereignty, including the inability of Eurostat to actually force the Greeks to open up all the data for review. So Greeks send the data to Eurostat which compiles it, then sends it to the ECB which looks at the data and all seems well - Greece is on the right path. But how? No one knew how they had fudged the numbers. The number fudging continued full speed ahead after the Greeks joined and it was at this point the Greeks turned to Goldman Sachs to help hide billions in debt. It's a neverending story of fraud and lies from the Greeks.
The "Greek effect": EU banks and markets have one week to feel the first incoming tsunami. We in Greece can live one day, one week, one month or even for ever without banks. We have our sea, our sun and our holy lands to nurture us. Can they survive the falling markets, bonds and coins? Can they hold their big chairs and bonuses with their economies collapsing? We wish them good luck and in one week we will give them a HUGE "NO" as a first nice move! THIS IS GREECE!
In Euro affairs, it's really hard to tell when anyone is saying what they really mean and not just lying through their teeth, but it looks like youre gonna be too late to make the NO party.
Do it, for Heaven's sake ... Look at Iceland and Argentina!
.
How do you recognize Muslims .... at a Greek beach resort .... they have clean feet, dirty left hand and rug burns on their knees !
Okay were at the moment where history is made... Duncan has swung the sword, the Light is pouring from Conor MaCleod Neck....... Wait for it... Wait for it... He begins to Scream.You can begin to see the Eagle's view of the great divide coming into focus... To be continued...
After the Banks in Greece declare a Holiday, those Greek Orthodox churchs in will be packed with parishoners begging for thier money back.
Church Holiday will be next
"Let the biggest rat die and force feed the rest" ..... where have we seen this before?
If you borrow you must pay it back! But the lender has a responsibility to assess the risk.
Both sides have been incompetent and now let it unwind!
The UN & Red Cross are going to be needed to fed the pensioners, And Deutsche bank can eat shit.
Helmet on, incoming
Why Syriza doesn't ask to leave EU and EURO ???? the best solution for them
Ninja Loans will be never paid back.
Jeez.
I wonder if Syriza will still be the beauty contest winner when the wholesale State worker layoffs begin along with the pension cuts.
I don't think the tax on swiming pools is gonna get the job done.
This is the feared moment, when sovereign debt is no longer considered sacrosanct and then the Potemkin village begins to fall over....
NOTHING will be allowed to fuck with the 'system' in place - nothing and no one will be allowed to circumvent policies in place by the powers to be. You want to fuck with them - do so at your own peril.
Now that the town is burning down...it is time to play the "blame game" ...no need to worry about the citizens..we need to get the blame squarely focused on the right party...
So the end of the beginning is finally starting. Never underestimate the ability of central banking morons to extend the inevitable.
At first sight, the natural sympathies of many people, especially on the left, will be with Greece. Is this not a plucky little country, standing up to the IMF and the richer eurozone countries to oppose austerity politics? And there can be nothing but sympathy for the plight of ordinary Greek citizens after a big drop in their standard of living, high unemployment and cuts to even basic public services.
But anyone who has actually looked into the figures and the details of this ongoing saga will know that it ain’t so simple.
Even before the worldwide financial crisis, Greece had a debt-to-GDP ratio of over 100%. It had fiddled its books to disguise the size of its deficits — not least when it applied to join the euro.
Unlike many other highly indebted countries, Greece’s massive debts really were caused by profligate spending combined with very widespread tax evasion (the latter of about €20 billion a year!)
It’s different from Spain and Ireland, whose public debt was even lower than Germany’s before the crisis hit, but had to bail out their banking sectors. It’s different from Italy, whose debt is largely financed internally. It’s different from Britain — and indeed others — because of the sheer scale of accumulated debts.
Deficits and debts of this magnitude are not a matter of Keynesian fine-tuning or counter-cyclical balancing. And there was little choice but to address them: this would have had to be done whether Greece was in the euro or not, in the EU or not.
I recently travelled from Bulgaria to Greece. Crossing the border was to go to a country with a visibly higher standard of living. But too much of that differential was engineered by the government borrowing money to pay higher salaries, and not for investment. Over the first decade of this century, unit labour costs rose by over 30% in Greece (compared to 5% in Germany). For public employees, this was even more striking: up 117%! It is not surprising that, as a result, prices in Greece rose by 30% above the eurozone median — a massive divergence of competitiveness. By 2011, Greece had a current account (trade) deficit of 9% of GDP.
Continuing to finance this by borrowing meant Greek public debt was well over 100% of GDP even before the world financial crisis hit Europe in 2008. By 2011, it had shot up to 170% of GDP (€355.141 billion). On the markets, no-one would lend to Greece at normal rates as the perceived risk of default rose.
So Greece asked for bailout loans from the IMF and from other eurozone countries. It was given the largest ever loan of this kind in history: long-term (30 years), low-interest (1.7%) loans destined to give it time to turn the corner. It also negotiated the biggest debt restructuring in history, with the private sector writing off nearly half of Greece’s debt. Without this help, the plight of Greece would be far worse. Far from imposing austerity, European solidarity actually attenuated the pain — a point often ignored!
Greece now has a primary surplus and did at last return to growth, after six years of economic decline, in the second quarter of 2014 — and was the eurozone’s fastest-growing economy in the third quarter of last year. It pays 40% less interest on its loans than it did in 2010. Before Syriza came to power early this year, it seemed that Greece had at last turned the corner.
Asking for more assistance does not go down well with the fellow eurozone members helping it out who have a lower standard of living (Slovakia, Latvia, Lithuania, Estonia).
Certainly, the way that deficits were eliminated left much to be desired. The thrust was on cutting expenditure, while the ultra-rich continued to avoid paying extra taxes. A gigantic defence budget (one of the highest in Europe as a percentage of GDP) was scarcely pruned as the military establishment protected its own.
Above all, many Greek politicians presented unpopular measures as impositions from Brussels or Berlin, as if they would not otherwise have happened. The instability of the Greek political system – now on its 6th government in 6 years – and the failure of its leading figures to take responsibility has, of course, not helped.
Unfortunately, Syriza is one of the culprits in that respect. Hopes that, as a left wing party, it would root out tax evasion and tax privileges, were dashed. It formed a coalition with a far-right party. Its talks with its creditors have seen wild swings in its positions from one day to the next — and from one minister to another. Just as agreement was hailed as near, new demands appeared at the last minute.
And now the latest twist: a referendum on the terms of the latest offer from Greece’s creditors, with the government urging people to reject it, but with no clarity of what is the alternative. As the Greek newspaper Kathimerini puts it this morning:
If Greece were to default, it would not necessarily lead to Greece leaving the euro any more than California defaulting means it leaves the dollar. In any case, if it left the euro and set up a new national currency, the latter would presumably devalue substantially, thereby increasing the size (in its own currency) of the debts. Greece imports most of its food and nearly all its energy, so a devalued national currency could double the costs of such necessities, with dramatic social consequences. And even preparing for an exit from the euro would trigger a wipe out of its whole banking sector, with enormous knock-on effects. It would hurt the euro too, but not as much – Greece is just 2% of the eurozone economy.
But a default within the euro would also do enormous economic damage, leaving the government unable to pay salaries and pensions, firms unable to borrow and frightening tourists away just before the crucial summer period that is also vital for the Greek economy.
There are just hours left to avoid such drastic scenarios.
http://www.richardcorbett.org.uk/greece-dont-take-it-at-face-value/
You have it the wrong way around. Big Government as represented by the EU/ECB/IMF et al is a purely LEFT-WING conspiracy. The Right Wing individual supports less Government, less bureaucracy, more individual freedom.
More National rights of the Nation State as opposed to delegating power upwards to supra-national organisations like the EU/ECB/IMF.
Although Syriza is nominally left-wing, rejecting the brainless austerity demands of the EU/ECB/IMF is a very RIGHT WING policy they are in fact advocating.
If they escape the Eu/ECB clutches and remain in power and try and implement their left-wing fantasies they will be confronted by the reality that other countries will no longer subsidise Greek Socialism. If Syriza is successful they will be actually taking Greece rightward rather than even further to the left. Because they are so far to the left at the moment all they'll be doing is actually heading in the direction of the political centre.
For anyone to describe Syriza as 'far left' is simply a gross misunderstanding of reality.
Sir, when was last time you visited planet Earth?
The Coalition of the Radical Left[16] (Greek: ??????????? ????????????? ?????????, Synaspismós Rizospastikís Aristerás), mostly known by its acronym Syriza (sometimes styled SYRIZA; Greek: ??????,pronounced [?si?iza]), is a left-wing political party in Greece, originally founded in 2004 as a coalition of left-wing and radical left parties. It is the largest party in the Hellenic Parliament, with party chairman Alexis Tsiprasserving as Prime Minister of Greece.
https://en.wikipedia.org/wiki/Syriza
No, default does mean leaving the Euro. They have no choice. Otherwise, the banks will never reopen.
Since you spend so much time on this you should help yourself and learn to know what you're blabbing on about. All that time and still clueless.
Where do they get the time to make these Big Decisions ... I mean with all the 7-course dinners, wine, champagne women....what Banker has the time?!
GAME OVER.
Now maybe they will fix some stuff.
Man it's times like these that I really miss the folks who used to comment on ZH circa 2009. Those cats were heavyduty and one could glean quite a bit of knowledge and understanding from their comments. Now we have a bunch of angry old and broke baby boomers who arrived at ZH via drudge and add nothing to the conversation. Damn you Tylers!!!
Generation Y here FTW HDMOTNK.
Did you just spill coffee on your keyboard?
I think he dozed off.
"now we have a bunch of angry old and broke [wannabe bankster] baby boomers"
and some old survivalists looking for a edge.
https://www.youtube.com/watch?v=gXjAVqLhXuo
Talks with Frankfurt? About what? What part of "Fuck West Turkey and fuck you" does Yanis not understand?
Greek leftist government is asking for extension of EU loan program in order to be able to reject it in referendum. Logic used to be Greek.
https://twitter.com/carlbildt/status/614817495581630464
Seems Greece is betting everything on Game Theory - well, we'll all see soon enough how well that works for them.
Wow, I did NOT see that coming!
Greek media are reporting that Alexis Tsipras has called a cabinet meeting in an hour’s time:
#Greece cabinet meeting at 8pm (GR) (via @ErtSocial) #politics #euro #ecb #ela #Greferendum
http://www.theguardian.com/business/live/2015/jun/28/greek-crisis-ecb-em...
Double post.
Happy Little Trees.
Draghi REALLY froze Greek ELA? Hmmm, I guess Goldman Sachs, in the end, came out ahead, especially after all the 'help' they gave Greece.
" BASIC DEMOCRATIC RIGHT" as defined by GREEK---
We will vote via referendum, blah, blah, for you, German, French, Italian, whoever and whatever, to pay for our expenses and benefits, whatever we see fit.
It would appear the shit just got real...
[Gandalf voice] So it begins...
[Same voice] Run,You Fools!
[Same voice (dvd release)] Fly, You Fools!