Sunday, June 28, 2015

Greek Banks May not Open Tomorrow

     So says one very powerful bank CEO:

     "Despite a tweet from Greek Finance Minister Yanis Varoufakis that his government "opposed the very concept" of any controls, reports surfaced on Sunday suggesting that Greek capital controls were imminent."

    "Asked, as he left the meeting of the Financial Stability Council, whether banks would open on Monday, Piraeus Bank Chief Executive Anthimos Thomopoulos, said: "No."
      "Additionally, a source told the wire service that the Athens stock exchange would not open on Monday either."
     Jeffrey D. Sachs puts the blame squarely with German finance minister Schauble for this development in a tweet:
     "When the history is written, it will be Minister Schauble, not Merkel, not the IMF, not even the Commission, that blocked an agreement."
     This confuses me though: how can Merkel not have any control over the actions of her own finance minister? I guess I have something to learn about  how the German system of government works.
    At end of the day Tsipras is doing the only thing he can do in putting this to a referendum. After all, there is short term pain in leaving the euro but long term in staying. 
    The Greek people don't want austerity-but they don't want to stay in either. So let them decide. Thereby they too have the responsibility in the results of this decision.
    At this point the pain is already being felt. 
    "Greece's left-wing Syriza government had been negotiating a deal to release funding in time for its IMF payment. Then suddenly, in the early hours of Saturday, Prime Minster Alexis Tspiras asked for extra time to enable Greeks to vote in a referendum on the terms of the deal."
    "Creditors flatly turned down this request, leaving little option for Greece but to default, piling further pressure on the banking system."
    "Long lines formed outside many ATMs on Sunday, including some of 40 to 50 people outside some in central Athens. The German foreign ministry issued a travel warning advising tourists heading to Greece to take plenty of cash to avoid possible problems with local banks."
    "The Bank of Greece said it was making "huge efforts" to ensure the machines remained stocked."
    "The ECB said in a statement on Sunday it was keeping its emergency liquidity at current levels but was monitoring the situation and stood ready "to reconsider its decision."
    "There is growing opposition in some European countries to extending the ECB's funding line."
    This may be a good thing. It may just be time to do away with band-aids.

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