Mario Draghi, President of the ECB at a press conference January 22, 2015 in Frankfurt (AFP / Daniel Roland )
The ECB has put the knife to her throat Athens Wednesday depriving Greek banks an important funding channel, forcing the Europeans to agree under penalty of crisis financing of the Greek state.
The monetary institution announced in the evening that it was suspending preferential treatment hitherto granted Greek banks, which allowed them to borrow money from ECB with lower guarantees that it usually requires.
The release of the ECB has been a bombshell in the financial markets, Wall Street turning red and the euro falling sharply in its announcement.
Greek Prime Minister Alexis Tsipras Hollande at the Elysee Palace on February 4, 2015 (AFP / Martin Bureau)
During the day yet the Greek Finance Minister Yanis Varoufakis had come in person in Frankfurt ask Mario Draghi, ECB president, enough to “keep their heads above water” time to s’ along with its European partners.
The new team at the helm in Athens, led by the leader of the radical left party SYRIZA Alexis Tsipras, wants to renegotiate its debt of over 300 billion euros and end the austerity cure imposed by its partners in exchange for their help. Messrs. Tsipras and Varoufakis are since Sunday on a European tour to rally support and explain their views
-. Increase the pressure –
Mr. Varoufakis will be received Thursday by the German Finance Minister Wolfgang Schaeuble, one of the strongest advocates of fiscal discipline in Europe. This should be the last step of this operation seduction already not very engaged, and the ECB has just made a big hit.
“On the bottom” other Europeans have not budged in their positions, said Wednesday German Chancellor Angela Merkel. They do not want to erase the debt and want to Athens continues its structural reforms
In Paris, where he received Mr. Tspiras Wednesday, French President Hollande has advocated “two principles.”: “solidarity” but also “respect (…) the European rules applicable to all.” And Brussels the European Council President Donald Tusk hinted “strenuous efforts” to reach a solution.
The European Central Bank will deprive Greek banks of one of their financing channels (AFP / File / Daniel Roland)
Mr. Draghi was obviously not inclined to be more accommodating. He asked Mr. Varoufakis Wednesday to “negotiate quickly and constructively” with its Eurogroup partners to ensure “financial stability” of Greece, according to a source at the ECB.
Suiting the action to the word, the Governing Council met Wednesday afternoon decided to increase the pressure on Athens.
The provision that suspends enabled Greek banks to finance purchases of Greek bonds, and therefore the Greek government to raise money. She was conditioned to the aid program which Athens benefit, and again until February.
– not dry –
But “it is not possible at present to anticipate a positive outcome” of the aid program, writes the ECB in its statement. In other words, he needs clarity on the future of the program – they are the ones initiated reforms carried out? What will happen after the end of February? – Before opening the tap.
The institution does not leave the Greek banks completely dry: first, they can always bring to the ECB as collateral other assets of Greek public debt; secondly, they will benefit from an emergency mechanism, called ELA, which allows them to receive funds from the Bank of Greece in the event of a liquidity crisis.
The ECB’s shot across the bow comes as Mr Tsipras was said Wednesday in Brussels “very optimistic” about the possibility of “a viable solution for our future.”
He proposed a reform plan and funding over four years (2015-2018), said a government source in Athens. The plan includes a “radical” program in the fight against corruption and tax evasion, coupled with an easing of budgetary obligations of Greece, the source said.
Several European leaders have called for action decided against corruption and cronyism, among them the European Parliament President Martin Schulz or the Vice-Chancellor of the German Government and Economy Minister Sigmar Gabriel.
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