Monday, July 6, 2015

The European Central Bank decides to increase the lending limit to Greek banks too late...

European Central Bank Cautiously Agrees to Keep Helping Greek Banks

The European Central Bank will maintain emergency loans of about 89 billion euros, or about $98.4 billion, to Greek banks, enough to keep the banks from failing but not enough to prevent them from running out of cash that they can issue to depositors within a few days.
The central bank also said it would tighten requirements for collateral that Greek banks must post in return for loans. The decision means that, even if the central bank decides to increase the lending limit, Greek banks might not have enough collateral to qualify for more emergency loans.
The decision was a concession to members of the central bank’s Governing Council who advocate a hard line for Greece, and a sign that the central bank was worried about losses it would suffer if Greek banks failed.

Merkel and Hollande Signal an Opening for Greece

Bertrand Guay/Agence France-Presse — Getty Images
Chancellor Angela Merkel of Germany and President Fran├žois Hollande of France said on Monday that Europe was ready to negotiate with Greece.
Speaking to the news media here after his meeting with Ms. Merkel,
Mr. Hollande warned that the government in Athens needed to make realistic proposals and implied that the time for gamesmanship was past.
“The door is open,” Mr. Hollande said, but he warned: “There’s not a lot of time left. There is urgency for Greece, and there is urgency for Europe.”
Ms. Merkel had a tougher tone than her French host, although she too said Europe was open to negotiations.
She noted that just as Greece had touted its vote against a deal proposed by European creditors as an exercise in democracy, the 18 other countries in the eurozone were also democracies, and their views had to be respected.
“We are now waiting for very specific proposals from the Greek prime minister to enable Greece to return to prosperity,” she said.
The German chancellor also noted that Europe has shown solidarity in its efforts to keep Greece in the common currency, and that the offer of a “generous” bailout proposal was another sign of that commitment.
Ms. Merkel’s characterization of the deal that the Greeks rejected by more than 60 percent suggested that there was still a long way to go to find a compromise.

Euclid Tsakalotos Says He’s ‘Nervous and Anxious’

Euclid Tsakalotos, who was sworn in as Greece’s new finance minister on Monday, said that the result of Sunday’s referendum in which Greek votersoverwhelmingly rejected the terms of a European financial bailout “is something that will remain in economic history.”
Mr. Tsakalotos thanked the man he replaced, Yanis Varoufakis, who resigned on Monday, for his efforts.
“The whole world, the whole planet, is talking about the need for a viable solution for Greece,” Mr. Tsakalotos said, adding, “I won’t hide the fact that I’m nervous and anxious. I understand that I’m assuming my post at a difficult time.”

Concern That Banks Could Run Out of Cash This Week

People lined up at A.T.M.s of the national bank of Greece in Athens on Monday.CreditAlexandros Vlachos/European Pressphoto Agency
Bankers in Athens are beginning to worry that without additional aid, banks could run out of cash on Friday, according to Stefanos Kotronakis, who works in Athens for a company that provides payment processing services for banks and A.T.M.s.
“The situation from a liquidity perspective is really critical,” Mr. Kotronakis, country manager for ACI Worldwide, said in a telephone interview.
People can continue to use debit and credit cards and make electronic transfers within Greece. But Mr. Kotronakis said many merchants insist on cash, in part because they are not sure that their money is safe in a bank.
“If you do a transaction and you ask the merchant, ‘How do you want to be paid?’ the answer is going to be ‘cash,’ ” he said.

Alexis Tsipras to Announce Further Government Shake-Up

President Prokopis Pavlopoulos’s office issued a joint statement on Monday by the leaders of five of the seven political parties represented in Parliament after a meeting led by Prime Minister Alexis Tsipras of the Syriza party.
Here is the text of the joint statement by the five party leaders (the Communist Party leader attended the meeting, but didn’t sign the statement, and the leader of the far-right Golden Dawn party did not attend).
The recent verdict of the Greek people is not a mandate for rupture but for the continuation and reinforcement of the effort to achieve a socially just and financially viable agreement.
It’s in this direction that the government assumes the responsibility for the continuation of negotiations. And every political leader will contribute, as well, within the remit of their institutional and political role.
The common aim is to achieve a solution that will secure:
• Sufficient covering for the country’s funding needs.
• Credible reforms based on the fair distribution of the burden and the promotion of growth with the smallest possible recessionary impact.
• A strong, front-loaded growth program, chiefly aimed at tackling unemployment and boosting entrepreneurship.
• A commitment to the launch of a substantial discussion as regards tackling the problem of the sustainability of Greek public debt.
The immediate priority is to restore liquidity to the banking system, in coordination with the E.C.B.
Mr. Tsipras was expected to announce a more extensive cabinet shake-up later Monday. The president’s office had already announced that Euclid Tsakalotos would succeed Yanis Varoufakis as finance minister. The changes would aim to put a more centrist negotiating team in place to deal with creditors.

Euclid Tsakalotos to Be Greece’s New Finance Minister

Euclid Tsakalotos, who will take over as Greece's finance minister, in Athens on June 27.CreditAlkis Konstantinidis/Reuters
Niki Kitsantonis, reporting for The New York Times in Athens, says that Euclid Tsakalotos will be sworn in as the new finance minister at 8 p.m. Greek time, according to the office of President Prokopis Pavlopoulos.
Mr. Tsakalotos was the official appointed to coordinate Greece’s negotiations with Europe in April in an effort to offset the confrontational style of the former finance minister, Yanis Varoufakis.
He’ll take his oath to succeed Mr. Varoufakis, who resigned on Monday, in the presence of Mr. Pavlopoulos and of Prime Minister Alexis Tsipras.

I.M.F. Leader in Wait-and-See Mode

Christine Lagarde, the managing director of the International Monetary Fund, reacted cautiously on Monday to the Greek vote.
“We are monitoring the situation closely and stand ready to assist Greece if requested to do so,” Ms. Lagarde said in a statement.
However, Greece is at least temporarily barred from drawing further I.M.F. funds after missing a payment to the organization of 1.6 billion euros, or about $1.8 billion, that was due last week.
Ms. Lagarde did not plan to attend the European leaders’ summit meeting on Tuesday, a spokesman said. The fund typically avoids meetings that are seen as political in nature.


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