Relations between Greece and its creditors reached breaking point on Thursday as the country's finance minister accused the European Central Bank of "asphyxiating" the cash-strapped economy.

In a series of traded insults, Yanis Varoufakis said the ECB, which has tightened the noose on the Leftist government, was "pursuing a policy that can be considered asphyxiating toward our government."   His comments came before Germany's Bundesbank chief Jens Weidmann said Athens had "squandered the trust" of its European partners.  As one of Greece's main three international creditors, the ECB has rebuffed Athens' requests to raise short-term debt to alleviate an impending funding crisis.   Greece, which has yet to be granted access to €7.2bn in bail-out funds, is scrambling to pay €1.2bn in loans to the IMF before the end of the month.

Athens has also been seeking a €2bn increase in emergency funding for its banks as deposit flight has accelerated over the past month. According to reports, the central bank decided to raise the ceiling by just €600m on Thursday. Greek lenders have been increasingly reliant on the expensive emergency funds from Frankfurt after the ECB stopped its ordinary lending to the country. The country's Eurosystem funding reached a 13-month high of €104bn, in February according to the Bank of Greece. But Mr Weidmann, who sits on the ECB's governing council, said the assistance had to be "temporary" and could only continue as long as Greek lenders remained solvent. 

The Greek Prime Minister Alexis Tsipras is in Brussels today to meet the European Commission’s President Jean-Claude Juncker.  The pair will attempt to make some progress on a way forward for Greece, after eurozone finance ministers rejected Athens’ reform proposals on Monday. Juncker said he was ready to make “proposals” to overcome the differences between Greece and its eurozone partners.  I’m not satisfied with the developments in recent weeks. I don’t think we have made sufficient progress.  I’m totally excluding a failure. I don’t want a failure. I would like Europeans to go together. This is not a time for division. This is a time for coming together.

Tsipras said he was optimistic the political will existed to find a solution soon. 

About time the ordinary elector of the EU rose up and threw these people out.

Frankfurt, the euro area’s financial capital and home of the common currency, is bracing for demonstrations and sit-ins on Wednesday at locations throughout the city by anti-austerity groups and organizations sympathizing with the plight of Greece.   At the ECB’s €1.3bn premises in the east end, police have erected barbed wire and barricades to keep the protesters at least 10 meters away.   “We want a march open to anyone, peaceful and not harming anyone,” Ulrich Wilken, a lawmaker for the Left Party in the Hesse state parliament, said on Tuesday after meeting with police to outline the marchers’ objectives. “We want an atmosphere of peaceful protest, not the kind of situation the police prepares for with its tanks.”   Nine days after the ECB started buying sovereign debt in a €1.1 trillion plan to revive inflation and rescue the economy, protesters are laying the blame for recession and unemployment in the 19-nation euro area at the doors of ECB President Mario Draghi and German Chancellor Angela Merkel.   A new government in Greece, led by the leftist Syriza party, is preparing emergency measures to boost liquidity as the cash-starved country braces for more than €2bn in debt payments on Friday. The country is unable to access bailout funding as it haggles with euro-area governments over the terms of its aid program. Its lenders have been cut off from regular ECB finance lines and pushed onto emergency credit from the Greek central bank. ...  hope they burn it down.  This sort of waste of taxpayers money by an unelected and unaccountable organization, the EU, is exactly what is wrong with the EU. The Billions they have stolen from the poor taxpayers across the continent forcing them into abject misery whilst lavishing it on themselves in grandiose edifices such as this and their gold plated pay and pensions. It is just like the old soviet union.  About time the ordinary elector of the EU rose up and threw these people out.

Greece back in the fold

After days of fractious exchanges with its international creditors, Greek Prime Minister Alexis Tsipras has urged Europe to show solidarity with his country as it awaits the approval of a vital bail-out extension.   Speaking after a meeting with European officials in Brussels, Mr Tsipras said his government was doing all it could to fulfill the conditions of its bail-out and called on Greece's partners to do the same.  Striking a more optimistic tone than in recent days, Mr Tsipras said: "we will find a solution because I strongly believe that this is our common interest.

"I believe that there is no Greek problem, there is a European problem."

His comments came after Germany's Wolfgang Schaeuble warned that Athens' brinkmanship over implementing economic reforms could result in a disorderly Greek exit from the eurozone - dubbed a "Grexident".   "To the extent that Greece is solely responsible and decides what is to happen, and we don't know exactly what Greek leaders are doing, we can't exclude it," said Mr Schaeuble.  The claims are unlikely to soothe tensions between Greece and the eurozone's largest creditor country.  Mr Schaeuble was the subject of an official complaint from Athens who accused the finance minister of making derogatory comments about his Greek counterpart Yanis Varoufakis.

But there were tentative signs of a thawing between the two sides, with reports suggesting Berlin was willing to stand down over its opposition to Greek plans to issue short-term debt to alleviate its funding crisis.  The European Cental Bank has so far rebuffed Athens' requests to raise the ceiling on the issuance of Treasury bonds.  Instead the ECB has been drip feeding its emergency assistance (ELA) to Greece's banks which have suffered from rising desposit flight since Syriza came into power. There we are then...Greece back in the fold...after all that hype...

Madness is in the air. Greece cannot stay in the Euro as it is presently engineered, and the threats and bluster will not change reality. One of the causes of the Second WW was Germany's parlous economic state caused in large measure by the punitive reparations demanded of Germany after the Treaty of Versailles. Countries are not single entities, they are the cultural conglomeration of millions of people with a common identity. When a country is put under duress like this, whether this arises internally or externally, that common identity becomes fractured and the country fails as a working institution. The risks are massive both for the people of Greece and the rest of Europe. Add in the problems in Ukraine, we're seeing some very worrying issues in Europe that desperately need cool heads and an ability to compromise. Instead we see a hardening of rhetoric and attitude and an ever widening gap between reality and reckless idealism... Why is Greece being allowed to use a fund set up, presumably to protect Greek bank depositors, to be used to pay off Greek government debts, pensions and salaries. If a private company diverted money like this they officers of that company would be arrested and put in prison and that is exactly where Klaus Regling deserves to be! Does the EU not have any law at all? A prosecutor to stop funds from being siphoned from one place to be used in another to suit the arbitrary desires of some unelected official?

The people of Europe need to start killing their EU overlords if this is how they are going to operate.

It seems the HFSF fund was set up by the Greek banks (ie before the 2010 EFSF), so it'd need to be protected by a Greek law. As it is though, only a few inches and a hand-grasp separate the central bank from the maw of the state.  The Greek social security funds are a different matter - they have their own funds and trustees. Syriza is trying to get at them, but they're resisting. It seems there's some long-forgotten 60-year old law that technically prevents the funds holding 'surpluses' in a separate bank account outside the Central Bank of Greece for more than 15 days. But if it goes to a higher court instance or needs legislation, that could be overtaken by what Macmillan called 'events dear boy, events!' ie default.  The EZ and ECB are (I was horrified to read) quietly gung-ho about the idea of the Greek unemployed and pensioned being robbed if the money goes to repay ECB/EZ loans. ('That's what all states do...')  This is all so disgusting, I don't think I can watch.

Deşi a tipărit cantităţi uriaşe de bani şi a dat drumul unui nou program imens de relaxare cantitativă, prin care va ajuta statele europene să se împrumute mai ieftin, cumpărând obligaţiuni guvernamentale de peste un trilion de euro, Banca Centrală Europeană este considerată responsabilă pentru „politicile de austeritae” din Europa.  „Principalul motiv al protestelor este faptul că BCE face parte din Troika, iar Troika e responsabilă pentru politicile de austeritate care i-au împins pe atât de mulţi în sărăcie”, a declarat, pentru Reuters, Ulrich Wilken, unul dintre organizatorii “Blockupy”, protescul care se va desfăşura în apropierea noului sediu de 1,3 miliarde de euro al BCE.  Troika include, alături de BCE. Comisia Europeană şi Fondul Monetar Internaţional şi monitorizează ţări precum Grecia şi Cipru care au beneficiat de programe de salvare, inclusiv prin iertarea de datorii. BCE este şi furnizor de finanţare pentru bănci din ţările cu probleme. Ministrul elen de Finanţe, Yanis Varoufakis, a criticat săptămâna trecută politica instituţiei, pe care o consideră “sufocantă”, critic făcută şi de organizatorii protestului.  “Cei de la BCE nu sunt aleşi în mod democratic şi, totuşi. Presează guvernele să acţioneze într+un anume fel tot timpul. Am văzut asta din nou în maniera în care au îngreunat posibilitatea Greciei de a se finanţa după alegeri”, a spus Wilken.  Recent, BCE a încetat să accepte titluri de stat emise de statul elen în schimbul finanţării, când noul govern ales a anunţat că nu va respecta termenii conveniţi iniţial în programul de ajutor. 

The European Central Bank has also taken a tough line with Athens, banning the acceptance on Greek bonds as collateral for its cheap loans. Greece is now asking the ECB to raise the cap on the emergency funding (ELA) it provides to the country's banks as capital has fled the country. The ECB could provide some relief for lenders at an emergency meeting to discuss ELA on Thursday, according to Bloomberg.  Half a billion taken from the HFSF (=the Greek banks' recapitalization fund) won't go far. Greece needs to repay 1.2bn by end March, and still doesn't have enough to pay salaries and pensions. Now they're trying to raid the social security funds, starting with 150m out of the unemployment fund, but meeting resistance from the guy who oversees it. (He realizes he'll never get it back.) Syriza are drawing on an old and tricksy law, but it looks to me as if they may have to pass further legislation to get at that money. OK, they 'only'(!) need 448m to repay the IMF in April - but then 747m in May, 1.5bn in June, 448m in July, plus 2bn ECB, plus 1.3bn EZ central banks repayments, 3bn ECB in August. Tax coffers are e-m-p-t-y.  The FT (apparently firm believers in fairies) think that "by April the left-wing government may have advanced far enough with structural economic reforms to draw down part of a 7.2bn loan tranche being withheld..."

Oh, come on! WTF, FT!

Guys, guys, enough already - it can't be done with a few iphone-wielding students shopping a few tavernas to the tax office.

German Chancellor Angela Merkel recently negotiated a cease-fire in Ukraine with Russian President Vladimir Putin. Within days, Ukrainian troops lost the city of Debaltseve to a new Russian-backed rebel offensive. At the same time, European negotiations on the Greek financial crisis broke down in acrimony. This is the hour of Europe, and it’s a disaster.  And really, it’s the hour of Germany, the West’s crucial player. Led uncertainly by Germany, the European Union’s response to Russia’s aggression was to impose trade sanctions.  By the same token, what’s prolonging the Greek crisis is Germany’s contradictory desire to force Greece to be disciplined so Berlin gets its money back, but also to keep Greece in the euro.  The result of that policy has been to push Greece into a deep depression and put its politics in a headlock. The Greek people broke out by electing Syriza, an idiotic Marxist party which has the sole virtue of believing Greece should be governed from Athens, not Berlin.  German policy in Ukraine has been equally useless. The Germans like to whine—actually a form of bragging—about the sacrifices they have made to impose costs on Russia. This is nonsense.  German exports to Russia in 2013 were under four percent of Berlin’s total, and over the first eight months of 2014, those exports declined by less than 20 percent.  Germany’s sacrifices in cracking down on Russia—which has invaded a sovereign European nation, annexed a chunk of its territory, and shot down a civilian airplane—has cost Berlin about $8 billion, in an economy worth almost $4 trillion.  No wonder Putin thinks the Europeans are pushovers. But it’s worse than that. The point of the cease-fire wasn’t to stop the war in Ukraine. It was to stop the nascent U.S. push to arm Ukraine. As Merkel put it recently, “progress on Ukraine cannot be achieved by more weapons.”  That is more nonsense. Until Ukraine can defend itself, the Russian-backed separatists have no reason to stop fighting. Building up Ukraine’s defensive power will be a long job, but it needs to start now.  The German opposition to arming Ukraine gives Russia a veto on Ukraine’s future: Russia can always threaten to restart the war if Ukraine resists its will.  So Germany, to get its money back, has pushed Greece into an economic collapse so serious that the Greeks believe the answer is Marxism.  At the same time, Germany moans about imposing sanctions on Russia that have cost it one percent of its exports, and it refuses to respond seriously to the fact that Russia is overthrowing a European nation by force of arms.  As the German magazine Der Spiegel put it, Merkel has done “exactly what Germans expect from her: Fight for peace, search for compromise with the Russians, and resist the Americans.”  Every nerve in Germany is straining not to sanction Russia, but to give it a hug and sell it a car. And much of the rest of Europe, frighteningly, has even less backbone than Germany.  Germany is not Europe’s master. But it is Europe’s manager. That management has been disastrous. In Ukraine, people are dying to get into Europe. In Greece, they’re dying to get out of it. In both places, Germany has practiced the worst kind of checkbook diplomacy: draconian and grasping in Greece, narrow-minded and skinflint in Ukraine.  The first “hour of Europe” came during the Balkan Wars of the 1990s, when Bill Clinton’s administration wanted to arm Serbia’s opponents to give them a fighting chance on the ground. The Europeans said no: the result was genocide.  Twenty years later, Europe is fecklessly downplaying catastrophes on its doorstep, narrowly focused on its commercial interests—and concerned above [all] with stopping the Americans.  Originally published in Newsday.