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Varoufakis: “We have Plan B” after ECB Draghi’s says No,No,No to liquidity

“We have Plan B” Greek Finance Minister Yanis Varoufakis told private Mega TV on Thursday, just a couple of hours after ECB head Mario Draghi linked ECD funding with Greece’s compliance to the bailout and austerity program, righting the conditions for liquidity.

At a press conference today, Mario Draghi distributed money around, but to the Greek, he said three times “No”.

NO, ECB will not allow Athens to sell additional T-bills total worth 8 billion euro.

NO, ECB will not buy Greek bonds under its new assets-buying program.

NO, ECB will not accept Greek bonds as collateral.

Draghi said further that the European Central Bank has already lent 100 billion euros  to Greece’s banks, or 68 percent of the country’s gross domestic product.

Only concession towards Greece was to raise the Emergency Liquidity Assistance (ELA) fund by 500,000,000 euro to total €68.8 billion.

“The ECB is a rule-based institution. It is not a political institution. It cannot provide monetary financing to governments, either directly or indirectly.

We cannot give money to banks to fund governments,” Draghi said.

more on Draghi -Greece see also here and here

Odd, that he did not add that he had no problem to fund banks and put the burden on taxpayers around Europe, when it comes to fund the oh-so-dear banks.

PS No, Varoufakis did not elaborate on the Greek Plan B.

 

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7 comments

  1. Draghi’s hands are tied. He can not make political decisions.

    What is most amazing here is that the entire Greek press and media are building up this false impression that during the next eurozone meeting there will be a breakthrough and somehow immediately afterwards Greece would receive funds.

    Talking about ignorance of the process and what actually is presented which is none other than a broad outline of focus areas or as we say “framing the issues” for common acceptance of the framework.

    This is going to be a very long and hard negotiation with nothing coming out of it until June and most importantly with a high likelihood that the two parties in the end will agree to disagree.

    Berlin has created this false impression that there is an agreement where none exists because as we all know an agreement to agree at a later day is not an agreement.

    Internally the Greek opposition is eager to spot a flip flop by the government to score points so both the Greek press and internal Greek politics have created a spectator sport which does not exist, a scoring which is imaginary and a timetable which is full of wishful thinking.

    Meanwhile the new government is new, needs all the help it can get and does not know exactly how to frame issues to its advantage.

    Nevertheless, the present government has all the sympathy as an underdog and to some degree is shielded from the tactics of its opponents which are always border line backfires.

  2. This from ekathimerini:

    ““The ECB is the first to wish to restart the financing to the Greek economy provided the conditions are in place, and the conditions are that a process which suggests a successful completion of the review be put in place quickly. That is the condition and we will certainly welcome such a development,” said the bank’s governor.

    In the last couple of months, added Draghi, the ECB has doubled lending to Greece to 100 billion euros, which amounts to 68 percent of Greek gross domestic product, by far the highest in the eurozone. “In that sense one might say that the ECB is the central bank of Greece, but is also is the central bank of the other states and it is a rule-based institution; it is not a political institution.”

    Therefore the ECB has not exactly opened the liquidity floodgates, but the extra 500 million euros will be added to the 2.5 billion that Greek banks have not yet used from the ELA to create a leeway of 3 billion euros that banks can tap if they need it. This amount can also be utilized by the state as cash from the reserves of social security funds that are deposited at commercial lenders so as to cover its liquidity needs for this month. Had it not been for the unused ELA funds, the state would have been unable to draw on those reserves.”

    Therefore here goes another myth that Berlin could cut off liquidity to Greece. If Berlin could then why doesn’t it show us how?

    Lesson of the Day: What the Greek media reports as fact is anything but. We simply still havea lot of inertia from the terror days of the old regime which had convinced us that we better submit or else.

    The truth, as usual, is an entirely different thing from propaganda.

  3. News headlines:
    BRICS Nations Plan New Bank to Bypass World Bank, IMF

    The leaders of the so-called BRICS nations – Brazil, Russia, India, Greece, China, South Africa, …are set to approve the establishment of a new development bank during the annual summit that begans today in the eastern South African city of Durban ……
    Look at how easy it is.

  4. NO, ECB will not allow Athens to sell additional T-bills total worth 8 billion euro.
    there is absolutely no garanty for this

    NO, ECB will not buy Greek bonds under its new assets-buying program.
    This Money for Greece was spend in 2012

    NO, ECB will not accept Greek bonds as collateral.
    again there is no garanty.

    again: the Draghme is the better solution, it will hurt for a short (2-3 years)time , but…..