Existential threat to euro from Greek exit

  • 29 June 2015
  • From the section Business
People queuing outside a cashpoint in Greece
A no vote could see Greek banks subject to severe restrictions on cash withdrawals and international transfers for the indefinite future

So whether the Greek government likes it or not, and apparently it doesn't, the President of the European Commission, Jean-Claude Juncker has said that Sunday's referendum is a vote on whether Greece will stay in the euro.

By implication it is also a vote on whether there is any chance of Greek banks re-opening as normal any time soon.

Here is the big point: there is zero chance of the European Central Bank turning Emergency Liquidity Assistance back on - life-saving lending to banks - unless Greeks give an affirmative vote to a bailout proposal from the rest of the eurozone and the IMF, which Juncker sees as a proxy for Greece's monetary future.

As for Athens, most of the Syriza government detests the bailout offer - for the way it pushes up VAT and cuts pensions.

So we will have the bizarre spectacle of a Prime Minister, Alexis Tsipras, arguing both against the bailout and for remaining inside the eurozone - so goodness only knows how he will vote.

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Greece's bank holiday from hell

  • 28 June 2015
  • From the section Business
People read newspaper headlines in Athens on 27 June
Decisions taken over the next few days will have profound consequences for Greeks

It was more or less impossible for Greek banks to open on Monday, once the European Central Bank announced it was turning off emergency lending to them.

Because in the absence of any increase in this so called Emergency Liquidity Assistance, the banks had no way to supply cash to Greek depositors who have been anxiously withdrawing their savings.

Read full article Greece's bank holiday from hell

Peston: ECB to turn off emergency Greek help

  • 28 June 2015
  • From the section Business
A man walks past a graffiti depicting a banknote in Athens,
Greek banks could be in serious straits by Monday

The European Central Bank's governing council is expected to turn off Emergency Liquidity Assistance (ELA) for Greek banks at its meeting later today, according to well-placed sources.

So unless Greek savers miraculously decide to cease withdrawing cash from their accounts, Greek banks would find themselves in serious straits as soon as Monday - because the banks have become dependent on ELA, approved by the ECB but supplied by the Bank of Greece, to provide the cash to depositors who want their money back.

Read full article Peston: ECB to turn off emergency Greek help

Greek debt crisis: ECB faces monumental decisions

  • 27 June 2015
  • From the section Business
Queue outside Piraeus Bank in Athens (27 June)
Customers queued for cash in Athens on Saturday outside a bank branch whose doors remained shut

The European Central Bank faces what is arguably the most challenging and important decision of its relatively short existence this weekend.

Will it continue funding Greek banks next week, in the uncertain days before next weekend's referendum on the bailout deal demanded by the country's major creditors?

Read full article Greek debt crisis: ECB faces monumental decisions

Why bankers believe Greece will do a deal with its creditors

  • 26 June 2015
  • From the section Business
Man in Athens passes mural of praying hands

It is going to be 24 hours from hell for Greek bankers (and of course for the Greek people).

Senior bank executives tell me they have more than enough cash in their branches to meet whatever demand for withdrawals there may be today - and in fact they believe that the rate of withdrawals by worried customers will remain at a lower level than at the beginning of the week.

Read full article Why bankers believe Greece will do a deal with its creditors

Greek tragedy: End of an act, not the whole play

  • 23 June 2015
  • From the section Business
Alexis Tsipras
Greek Prime Minister Alexis Tsipras may be laughing now, but does this play have another twist in the tail?

There is a script which seemingly all eurozone leaders are urged to learn, which is that if the currency union is in the grips of crisis, no solution can or should be found till markets and economy are on the verge of a heart attack.

So it is playing out again, as Greece has struggled to secure adequate loans from its eurozone and International Monetary Fund (IMF) creditors to avoid the disaster of failing to keep up its payments to the IMF.

Read full article Greek tragedy: End of an act, not the whole play

Stathakis: Greece rescued

  • 22 June 2015
  • From the section Business

In an exclusive interview, Greece's Economy Minister Giorgos Stathakis has told me that he believes Greece's new proposals to balance the government's books have broken the deadlock with its creditors.

He said he expects eurozone government heads to issue a communique later today that will say there is now a basis for a formal agreement with Athens to complete the current bailout programme and release €7.2bn of vital funds.

Read full article Stathakis: Greece rescued

Dire warning from Greek bank boss

  • 22 June 2015
  • From the section Business

If I had any doubts about the dire state of the Greek banking system, and why it matters so much for the Greek government to reach an agreement with creditors today to escape default, those doubts were dispelled in an interview with the chairman of Greece's fourth-biggest bank, Nikolaos Karamouzis.

Mr Karamouzis confirmed to me that the European Central Bank (ECB) has agreed to keep Greek banks alive today.

Read full article Dire warning from Greek bank boss

How long to Greek capital controls?

  • 22 June 2015
  • From the section Business
Greek protests

All over Europe regulators and politicians are preparing in case of failure by eurozone government-head talks that would avert default by the Greek government, and for a probable acceleration of withdrawals from Greek banks, a run in all but name.

The point is that Greek banks are very close to the absolute limit of how much they can be funded by the European Central Bank and the Bank of Greece - in that around a third of their lending and assets is financed by the respective central and national banks in this way.

Read full article How long to Greek capital controls?

Is there any way Greece can avoid default?

  • 19 June 2015
  • From the section Business
Alexis Tsipras and Yanis Varoufakis, 13 June 2015
Tsipras and Varoufakis

Part of what divides Greece and its creditors is the detail of budget cuts and economic reforms demanded by eurozone governments and the IMF.

And the rest of the gulf is due to a monumental clash of expectations between the scope of what can be agreed by the deadline of 30 June.

Read full article Is there any way Greece can avoid default?