Daily Management Review

ECB Rejected to Ban Greek Banks Investments


03/19/2015


ECB has rejected a proposal by its oversight branch to ban increase Greek banks investments in short-term government bonds. As Bloomberg reported, citing sources in European diplomatic circles, ECB fears that such a move would jeopardize negotiations with Greece creditors.



Currently, short-term papers, the main source of liquidity for the Government of Greece, are suffering from a lack of finance.
ECB Single Supervisory Mechanism (SSM) is concerned about the risk of default associated with such debt. Earlier the management of SSM urges Greece banks not to be led by the country's government, which insists on the redemption of short-term bonds issued in full.

On Wednesday, outflow of deposits from Greek banks amounted to 300 million euros, the highest since the February deal bargain with creditors to extend financial assistance.

ECB decided to increase the upper limit of the program of emergency lending to Greek banks up to 400 million euros - to 69.8 billion euros.

It is worth recalling that the officials of the International Monetary Fund said to colleagues from the Eurozone that Greece is "the most difficult customer" of all those with whom the fund had to deal with over 70 years of its history, Bloomberg reported, citing informed sources.

During a short and very emotional conference on Tuesday, representatives of the IMF, the European Central Bank and the European Commission have expressed outrage at the failure to comply with conditions of February deal with Greece to extend the term of the international financial assistance. Panelists also claimed that Greece is out of cooperation with creditors.

In particular, representatives of the Ministry of Finance of Germany said that attempts to persuade the government of Greece in the necessary of austerity are fruitless, comparing them with riding a dead horse. A team from the IMF announced that the Greek attitude to creditors is unacceptable.

Among analysts and officials is growing concern about the intransigence of the Greek cabinet led by Alexis Tsipras, which can lead to the fact that Greece will leave the Eurozone. In recent days, economists of Morgan Stanley, UniCredit and Fitch Ratings expressed such concerns too.

In particular, the European Commissioner for Economic and Financial Affairs Pierre Moscovici admitted the possibility of a Greek exit from the Eurozone in the interview with Die Welt on Wednesday.
We will not seek to hold Greece in the euro zone at any price, but only in cases where strict rules are acceptable to both sides. 
At the same time, he stressed that this step will negatively affect the monetary union, reports Deutsche Welle. Euro is a single currency. If the Eurozone will lose some part, the damage will be caused to the monetary union as a whole, - said Moscovisi.

Brussels is prepared to meet Greece, if the government in Athens will show a willingness to cooperate. According to EU Commissioner, the parties understood that the third package of financial aid to Greece would look different from the previous two.
Meanwhile Tsipras still has strong expectation for the meeting with German Chancellor Angela Merkel and the ECB on the sidelines of an EU summit in Brussels on 19-20 March, says Bloomberg. March 23, the Greek government will visit Berlin at the invitation of Merkel.
 
Greece requires additional liquidity from international lenders within the already promised funds, or money from her government may end in March.






Science & Technology

Bain & Company: E-wallets and cheaper transactions are new payment trends

Is UAV drone industry falling into decay?

UK Scotland Yard employs AI to deal with frauds

US sets to fight robocalls outbreak

Top 7 green energy innovators

Volvo’s New Car Uses Blockchain For Recycled Cobalt

False Memories Can Be Created By Fake News On Social Media, Shows A Study

DEF CON Hosts Auto-Makers And Cybersecurity Enthusiasts

WHO found no danger in microplastics in drinking water

Apple starts testing Chinese OLED screens for iPhone 12

World Politics

World & Politics

US FAA invites representatives from 50 countries to discuss 737 MAX certification

Iran Blamed By US’s Pompeo For The Drone Attacks On Saudi Oil Facility

IMF: Georgieva is the only candidate to replace Lagarde

Saudi Arabia to issue tourist visas

USA introduces sanctions against Iranian space agencies

Investments continue to flow into Cape Verde and exceed expectations of Minister of Finance Olavo Correia

USA, UK to create a working group on economics

Global Fashion Companies Support Environment Protection At G7 Summit