
Tuesday, March 24, 2015

Monday, March 23, 2015

Tsipras was believed to have told the German leader that Greece faced insolvency within weeks without the release of more funds, which are being held up because he has failed to produce a coherent policy package. “The medium-term liquidity problem is well known,” he said. “We inherited it.” While neither side wants Greece to leave the euro, the lack of agreement in Berlin signalled a digging in of hardline positions on both sides that could result in a major negotiating failure. Support for the Greek government remains strong at home, in inverse proportion to the lack of trust in Tsipras among his main creditors. A growing majority of Germans do not believe Greece will do what it must to stay in the euro and would prefer to see it leave. The Eurasia group risk consultancy on Monday raised its assessment of the chance of Greece having to quit the euro to 30%, up from a previous 20%. “The prospects of a deal over Greece are diminishing, as Germany, the eurogroup and Greece continue to posture,” said Mujtaba Rahman, its eurozone analyst. “The chances of capital controls, and ultimately, Greece’s exit from the euro, are also increasing. While Berlin still wants to keep Greece in the eurozone, it can and will not be flexible regarding the conditions attached to more financial aid.”

Summarising the outlook for other big economies, the thinktank says: In Japan, monetary and fiscal stimulus provide the impetus for faster near-term growth, but longer-term challenges remain. A gradual slowdown in China, towards the new official growth target, is expected to continue. India is expected to be the fastest-growing major economy over the coming two years, while the outlook is likely to worsen for many commodity exporting nations, with Brazil falling into recession.”
Sunday, March 22, 2015

So, not a single foreign investor at this morning's Greek T-bill auction - same as last week. Only Greek banks were arm-twisted into rolling them over again. Hand to mouth stuff - settlement date for today's bids is Friday, when the prior T-bills mature. No new money was raised, simply refinancing. This gives the ECB a massive problem - as not even a shred of 'market access' to support a decision to extend ELA. It would be demonstrably financing the Greek State if it increases ELA tomorrow (other than offsetting capital outflows, as before)..
Saturday, March 21, 2015

Friday, March 20, 2015

Alex Brazier said that Greece could, in theory, run a surplus large enough to shrink its debt mountain, which currently runs to 176pc of GDP, after bail-outs worth €245bn. However, he said no elected government would be able to do so, suggesting that Greece will be left with an enormous debt overhang for some time. Figures from the Bank of Greece released on Monday showed the country had fallen back into deficit over the first two months of the year. Greece was in the red by €684m January and February, compared to a €139m surplus it registered over the same period last year. Mr Brazier is a senior figure at the Bank, as its executive director for financial stability strategy and risk and a member of the Financial Policy Committee, which tries to ensure financial stability in the UK. I would like all of those who make the claims about "whining" Greeks and all these very 'humanitarian' comments to imagine what it is like to have 40-50% of their incomes lost due to adjustment policies. Fat chance these 'humanitarians' will and - what is worse - many of the people here making these comments are most likely Greeks themselves. Apart from that, it is true that Greece has been tainted by corruption, malfunctioning and ailing institutions, and a mentality of extremely low trust - all these making a vicious circle. But ask yourselves this (at least those of you who do bother to read and whose open mind is not narrower in reality than the margins of a school notebook): This has been going on for decades if not centuries, any wonder why it came to a boil now, the debt especially? It is because of the whole banking crisis and more specifically banks lending Greece in the good-ol' years and now basically getting away with it in all of EU... "One can surely agree with the logical and legal demand for Greece to pay its debt, however, one thing I can't understand is: What continual logical sequence is connecting faulty banking system, obviously wrong political decisions leading to fiscal imbalance and bankruptcy, on the one side, with massive public cuts affecting only simple people, on the other side, in other words: "Why punish simple people for bankers and politicians wrongdoings?!" Why are people making wrong decisions put automatically out of the equation and not took under consideration?"
Thursday, March 19, 2015
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.
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