Galery

1

The most critical moment following the day of the "failure to reach an agreement" in Brussels is associated with the European Central Bank and the upcoming talks on Wednesday on the position it will take in terms of financing the Greek banking system.

Last week the European Central Bank preventively and sharply increased the amount of the Emergency Liquidity Assistance ELA with 2.3 billion euro to be able to cope with any increased demands in the event that the negotiations in Brussels fail. Now this move turns out to be appropriate.

It is not certain, however, that it will continue in the same direction after the termination of negotiations.

The Governing Council of the European Central Bank expects progress in the talks between Greece and its creditors to reconsider its position on the financing of the Greek banking system by exploring again both the assessment of the Greek guarantees for ELA and the use of tools for emergency funding.

Senior officials from the European Union noted last night, after the termination of negotiations, that "the European Central Bank requires concrete progress by Wednesday noon at the latest. Otherwise it will reconsider its position on the financing of Greek banks under adverse conditions..."

Meanwhile, the Anglo-Saxon economic press seems to particularly emphasize the likelihood of imposing restrictive measures on the Greek banking system, similar to those that were taken during the crisis in Southeast Asia and Argentina in the 1990s, but also in Cyprus in the spring of 2013.

The statements by senior officials at the International Monetary Fund such as Olivier Blanchard deserve attention too. In his commentary, he emphasizes the need to launch the revised fiscal adjustment programme for Greece (the part for the primary surplus in particular) on the one hand and the need to immediately settle the debt issue in conjunction with the reform of the social security system on the other.

In any case, despite the suspension of negotiations in Brussels, all sides have become highly active in order to achieve progress in the next 48 hours before the regular meeting of the Council of the European Central Bank in Frankfurt on Wednesday. It will take place at 12 o’clock before the Eurogroup meeting on Thursday.

Bankers advise depositors to be calm, stressing that the last minutes of the time for negotiations should be used to make clear and definite conclusions on the course of the country.

Simultaneously, they are not hiding their concern because of the constant sticking points in the negotiations between Athens and the creditors, institutions, urging the Greek government to accelerate the process and reach an agreement no later than Wednesday, when the European Central Bank will meet. Moreover, they emphasize that the government has to sign an agreement, however painful it is, if that is the condition for Greece to avoid falling into the abyss.

At the same time, the fact that around 600 million euro was withdrawn today from ATMs and bank counters is significant. It is nearly 2.5 times more than the deposit run on Friday, as shown by unofficial estimates made by banking sources just before closing time. The funds were withdrawn from banks after the workday began, from morning to 2:30 pm today.