Where @paulmasonnews and the @ecb head of comms have a row about Greece pic.twitter.com/OSd3fCYDCP
— Gavin Sheridan (@gavinsblog) February 4, 2015
ECB Shuts Off Direct Funds to Greece (Bloomberg)
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Everything. As It Happens.
The ECB has essentially pointed a gun to the head of the Greek economy, cutting off all non-ELA (Emergency Liquidity Assistance) funding to their banks. It’s a move that will put more pressure on the Greek banking system as people will start taking their money out of the Greek banks, meaning the Greek banks are going to need even more ELA to cover those deposits. It’s not a million miles away from how the ECB previously leaned on Ireland to get us into the bailout.
The ECB didn’t explicitly say why it did this, probably because if it were to literally say “we’re forcing a bank run to teach Greece a lesson”, there wouldn’t be a cent left in a Greek bank come morning, which begs the question why? Why risk the stability of the Eurozone, write off a quarter of a trillion worth of Greek debt, and create the precedent of a Euroexit which will be priced in by the markets? The ECB is doing two things it isn’t supposed to do, push a bank run on a member state, and make a move that is explicitly political.
It boils down to Greece is being a pawn when it comes to the bigger problems of Spanish, French and Italian economies, but the kind of reforms that the Germanic austerity hawks are pushing on these countries have been an unmitigated disaster in Greece. It’s not as if they don’t know this either, the move towards QE is an indication the ECB understands the futility of austerity.
So the options are a) keep Greece in and put in place a more stable mechanism that’ll also for better currency recycling within the EU or b) Kick Greece out, wave goodbye to a quarter of a trillion, destroy the Greek economy (for about two years, but frankly if the ECB is mad enough to force them out they’re better off out of it), have the risk of further exits priced in, the underlying issue of imbalance between surplus and deficit countries will either be resolved (in which case Grexit will be an act of utter sadism), or it won’t be (in which case the Eurozone will fall apart). In other words the ECB doesn’t give a damn about Greece or the Greek people, you might say “well who said it had to?”, in which case you should really ask yourself what it means when we put the whims of banking institutes over and above those of human beings, who’s supposed to be serving who here?
It’s ugly posturing by the ECB governing council, essentially in our name as European citizens, vile and stupid.
*that’ll ALLOW
Clear, concise, and to the point. Excellent stuff, SOMK.
I think part of the issue here is that there is no political solution because especially since the turn of the Century Governments have entrusted financial policy to banks. The net results is now there is no sound political mind capable of formulating political strategies to reign in financial crises.
This has been an evolving trend since Regan in the 80’s and now every western democracy is controlled essentially by financial institutions some of which have so much money that the U.S. Federal Reserve classify as countries.
For these crises to reach any kind of meaningful resolutions countries HAVE TO break up these banks and bring them down I. Size by a multiple of factors.
The EU needs the financial institutions to come up with the play on this one. They simply don’t have the faculties to run it them selves.
This is just my read on the myriad of financial crises enveloping the West, not just Greece.
My first thought was this is this is a threat to the Greek government ad really should be WAY beyond the remit of the ECB.
Which would suggest that it is probably about as transparent a move as they could possibly make, given that I am no great economic thinker.
This is a seriously sinister turn.
As in really feckin scary.
It suggests that they are willing to decimate a states banking system to assert their control.
Its tin-foil hat stuff come true.
I disagree that this is similar to anything that happened when the ECB leaned on us. Nobody in Government ever seriously suggested anything like as threatening to the established order as Syriza have.
And if as you say it blows their economy for 2 years only, 2 years is enough to turn the Greek people against Syriza. People think with their pockets after all.
Well put, SOMK.
+1
Didnt see that coming.
Mason is an interesting fellow. he ticks all the boxes for me. Sheridan is a Young blogger who needs to get out more. more to journalism than looking at spreadsheets and foi requests.
Gavin Sheridan is a national hero who toiled away for years to bring transparency to public life in Ireland, submitting FoIs, appealing to the information commissioner and European ombudsman. He’s an absolute star. These days, he’s a director of Storyful these days, the company bought by Rupert Mudoch for millions. Gavin’s a star (and I’m not his mother!)
I bet that Greek finance minister wishes he wore a suit. Swagger, not so much now.
ECB is protecting its own finances, why lend to Greek banks if the probability of default has significantly increased?
Nasty, fascist ECB basturbs? You own 2% of the ECB, so are you willing to foot 2% of the losses in Greece?
BTW, that just gives you an insight into how other European countries viewed Ireland in 2008-2012,
The sense of entitlement in Ireland (and in Greece) is quite unbearable and suffocating at times.
When I use this phrase I use it at every level of society from government officials down to the lower class welfare recipients. There is a parasitical entitlementariat literally bleeding the average working man dry.
Sadly – the citizens have long devolved decision-making power to the EU Commission and ECB so they are an accident waiting to happen.
Just remember Vote Lisbon – for Jobs, Growth and getting ridden up the hole.
The citizens voted no to Lisbon.
Then the lies, threats and intimidation started, the citizens were told to vote again, and – this time – vote the way the criminal banksters wanted them to. Or else.
When you saw even Eamonn Dunphy jumping on that gravy train…
…whatever about the criminal banksters…wasn’t it Comrade Gilmore who was exposed by Wikileaks briefing the yanks about a second Lisbon Treaty vote and how confident he was that it would be approved.
LOL at the geniuses who thought Syrzia would mean great things for Greece.
How’s that “Hope and Change” workin’ out for ya?
can you really afford to yuk it up? except for a spineless government that’s us all right there.