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Stand-off between Greece & Lenders allegedly “different than in 2015”, but Greeks on the verge of nervous breakdown

The stand-off between Greece and its European lenders and the IMF continues also on Thursday morning. While the proposal by Greek Prime Minister Alexis Tsipras for an EU Summit has been turned down by the European Council and Germany, it is still not clear when an extraordinary Eurogroup will take place. According to media reports, the Greek government has launched a race of contacts to achieve a meeting of eurozone finance ministers as soon as possible. There are claims that the crucial meeting could take place next Tuesday or Thursday, May 3rd or 5th 2016, although Jeroen Dijsselbloem seems relaxed and takes his time implying that the meeting could take place within the next two weeks.

Athens reportedly is awaiting for a new intervention by European Council president Donald Tusk to push for a Eurgrooup meeting as soon as possible.

The representatives  of EU, ESM, ECB and IMF are due to leave Athens today without the conclusion of the Review Talks and without detailed Greek plan for the IMF’s contingency measures worth 3.6 billion euro that should be automatically implemented should Greece miss the 3.5% Primary Surplus in 2018. For legal and constitutional reasons, the Greek Parliament cannot vote anyway for a package of specific austerity measures now based on the “if… then…”-hypothesis.

Given the deadlock, that was in fact clear a couple of days ago, the Greek government has started sweeping the cash reserves of the public sector. Health facilities, utilities,hospitals must deposit their cash reserves to the Central Bank if they do not immediately need it. Athens needs to pay its bills and the delay in 3. bailout Review Talks + 3.6bn IMF extra measures package postpone also the disbursement of the bailout tranche estimated to be over 5 billion euro.

By end of April, which is now, Greece has to pay to the IMF 400 million euro. In July, 2 billion euro are due to the ECB. It has also to pay wages and pensions and this every month.

Time presses, cash is needed and many think of a deja-vu situation like in 2015 when Greece was fighting again its lenders and was forced to capitulate with a 3. bailout to avoid the total default and a possible exit from the eurozone. Lenders have all the tools to bring the debt-ridden country into its knees and they do so with an exemplary sadistic pleasure.

“The state’s cash reserves are running so low that they have entered emergency territory and the Finance Ministry has already started utilizing public sector entities’ cash surpluses to cover its requirements via short-term borrowing in a situation reminiscent of last spring. Unless the disbursement of the installment is made within May or by early June at the latest, the state’s expired debts will start to grow again.

Another consequence of the extended review negotiations is the prolongation of Greek banks’ negative status in drawing liquidity from the European Central Bank. Frankfurt has made it clear that in order to restore Greece’s waiver to the rule forbidding the supply of cheap liquidity to countries with junk sovereign bonds, the bailout review will have to be successfully completed first. Furthermore, Greece will remain outside the ECB’s quantitative easing (QE) bond-buying program for as long as the review continues.” (ekathimerini)

According to Reuters, the government has used between roughly nine billion euros ($10 billion) and 10 billion through repurchase agreements since last year, most of which has been rolled over, officials said. “The situation is not pleasant but not as dramatic as last year,” said one government official, who declined to be named. “But the more time passes without concluding the review, we could find ourselves with our backs against the wall.”

The situation is allegedly less dramatic, like the sequel of  Greek Drama 2015. According to a Bloomberg analysis:

The deposit run has stopped not due to the banks recapitalization but due to the capital controls imposed  June 29th 2015 and which are still still in effect.  Given the current situation end April 2016, and the threat that Greece may run out of cash again, Greeks would have rushed to the banks again to get hold of their money. However with the capital controls, Greeks are not allowed to withdraw more than 420 euro per week.

Three days before the Greek Orthodox Easter and while people make the Easter preparations they can afford, a weird, numb atmosphere is in hanging in the air mixed with the gentle April wind and the fragrance of the spring flowers.

A friend told me, he was sure that “we will go bankrupt because Schaeuble wants so” and that “this is the last Easter we will enjoy lamb, red eggs and sweet bread Tsourekia.” Another friend asked me, “when the capital controls would be lifted” … And a third one wondered whether the  banks would open again. Apparently in panic due to the new crisis and scared due to the bad experience in June 2015 where banks were closed and deposits blocked, she and some of her family members were weaving horror scenarios – allegedly sparked due to the long 5-day Easter holiday for public services and the banks.

PS but why should banks close when capital controls in effect? It makes no sense, does it?

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9 comments

  1. Does ANY of this whole sorry mess make any SENSE?!

    • Giaourti Giaourtaki

      For Herrenrasse like Saugosch Schäuble it’s already a mega-crime to be so charming to remind of German war-debts – they punish Greece even more and laugh about the little kid – these kind of Krauts will not forget that the resistance in Greece gave’em another Stalingrad.
      So, the only chance Tsipras has is to go to the international courts and let Germoney bleed for it’s crimes.
      And don’t forget the meaning of the name “Junker”, it’s something like a (country) squire and in former GDR still a swear word

  2. You state “There are claims that the crucial meeting could take place next Tuesday or Thursday, April 3rd or 5th 2016, although Jeroen Dijsselbloem seems relaxed and takes his time implying that the meeting could take place within the next two weeks.”

    Surely you meant Tuesday or Thursday May 3rd or 5th 2016?

  3. Nothing is different from 2015. The Europeans will have their pound of flesh come what may. And Greece will be blamed for not cutting it off its body sooner and for bleeding to death to boot.

  4. Went to Heraklion today. Terraces crowded with people who did’nt seem to have problems with a crisis. Went to a restaurant and very hard to find a table for 2, all businesses were packed. Paid cash for the lunch. No receipt. As usual.

    • Giaourti Giaourtaki

      Typical anti-Greek blabla by stupid, even if all bars, restaurants and cafes of Greece would be overcrowded this wouldn’t make more than 0.1 percent of the population. Also recipe one can find in a book store, pl ask for recipe book or ask in your own country the cook for recipe

    • I was there in Heraklion too. Wall to wall tourists (thank you God), bringing much needed cash and jobs for the locals. If Djuul understood Greek he would have understood this.

  5. Giaourti Giaourtaki

    The fat antisocial minister of antisocial German government wants to change German welfare laws, then to receive support non-German Europeans have to “live” 5 years in Germoney.