from Hacker News

Greece debt crisis: ECB 'to end' bank emergency lending

by YPetrov on 6/28/15, 9:34 AM with 100 comments

  • by randomname2 on 6/28/15, 12:28 PM

    ECB statement:

    ELA to Greek banks maintained at its current level

    - ECB takes note of decision on Greek referendum and the non-prolongation of the EU adjustment programme

    - ECB will work closely with Bank of Greece to maintain financial stability

    - Emergency liquidity assistance maintained at Friday’s (26 June 2015) level

    - Governing Council stands ready to review decision

    - Governing Council closely monitoring situation and potential implications for monetary policy stance

    The Governing Council of the European Central Bank today welcomed the commitment by ministers from euro area Member States to take all necessary measures to further improve the resilience of euro area economies and to stand ready to take decisive steps to strengthen Economic and Monetary Union.

    Following the decision by the Greek authorities to hold a referendum and the non-prolongation of the EU adjustment programme for Greece, the Governing Council declared it will work closely with the Bank of Greece to maintain financial stability.

    Given the current circumstances, the Governing Council decided to maintain the ceiling to the provision of emergency liquidity assistance (ELA) to Greek banks at the level decided on Friday (26 June 2015).

    The Governing Council stands ready to reconsider its decision.

    Mario Draghi, ECB President, said: “We continue to work closely with the Bank of Greece and we strongly endorse the commitment of Member States in pledging to take action to address the fragilities of euro area economies.”

    Yannis Stournaras, Governor of the Bank of Greece, said: “The Bank of Greece, as a member of the Eurosystem, will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”

    The Governing Council is closely monitoring the situation in financial markets and the potential implications for the monetary policy stance and for the balance of risks to price stability in the euro area. The Governing Council is determined to use all the instruments available within its mandate.

    https://www.ecb.europa.eu/press/pr/date/2015/html/pr150628.e...

  • by elmar on 6/28/15, 12:01 PM

    They have to impose capital restrictions fast...

    What Would Greek Capital Controls Look Like?

    http://www.bloomberg.com/news/articles/2015-06-01/how-greek-...

  • by lifeisstillgood on 6/28/15, 11:26 AM

    tl;dr ECB has leaked to BBC they will cut off emergency lending that covers the panic withdrawals. This will kill the deal and force a grexit, even before 5 July referendum. However French PM does not think they have enough independence to do that.

    So we have a democratic nation potentially forced to leave Euro, after democratically deciding it no longer wants the austerity imposed, being forced to leave by non democratic ECB while the democracies that appoint the ECB think it is going too far.

    What's that quote from Hunt For Red October - "with all these planes in the sky, it's only a matter of time [before we start a war]"

    The lesson for democracy - force governments who are going to adjust fiscal measures past a certain point to get referendum approval

    - and look how well that works in California...

  • by jkot on 6/28/15, 11:30 AM

    There were similar leaks from ECB to force Irish to take bailout. Anyway we will see on monday, right now some ATMs in athens are still working.

  • by DanielBMarkham on 6/28/15, 1:00 PM

    They say that newspapers readers and television viewers love a train wreck, a situation where everybody knows very bad things are coming and we all pop the popcorn and watch. It's a sad reflection on human nature, but audience numbers prove it out.

    But wow, the Grexit is painful even when put into the train wreck category. It's going on and on, and the invective, hate, and hard feelings linger and fester. The amount of misery this has produced seems vastly out of proportion to the incident itself. I wonder if severe, immediate action taken at the beginning of the crisis wouldn't have resulted in something much less painful than this. 25% shrinkage in the economy and then massive bank closings? Good grief. It's becoming reminiscent of post WWI Germany.

  • by dataker on 6/28/15, 12:21 PM

    >after five years of lender-imposed austerity that has increased Greek unemployment

    That's a very easy target. Probably easier to ignore the high cost of hiring, bureacracy, corruption,...

  • by sambe on 6/28/15, 12:44 PM

    Several people are interpreting "stays the same" as good news for Greece and contrary to the article. I interpret it as the opposite: it will not expand further to meet the demand, thus Greek banks will run out of money. I didn't have the impression anyone expected the full amount to be recalled.

  • by the-dude on 6/28/15, 12:30 PM

  • by randomname2 on 6/28/15, 11:48 AM

    The BBC should know better than this, using "unnamed sources" to quote a rumour as fact.

    No decision has been made yet, so this is just misinformation. Expect more of this over the next days.

  • by MichaelMoser123 on 6/28/15, 1:11 PM

    What kind of capital controls? in this situation it is quite an oxymoron. With a different currency you can control the exchange rate or limit how much one is allowed to exchange, however Greece still has the same internal currency - the Euro. You don't have a Greek euro only - its the same currency.

    To me all these conflicting reports smell like panic; decision makers just don't know what to do now, and the BBC does not know what to report. Sounds like 2008 all over again.

  • by estefan on 6/28/15, 12:36 PM

  • by jacquesm on 6/28/15, 2:16 PM

    Flagging this, way too much un-informed nonsense in this thread, lots of heat and little or no light.

  • by themartorana on 6/28/15, 11:28 AM

    As I understand it, one of the major underlying issues this whole time (aside from the silliness of trying to integrate Greece's economy with Germany's) was the ECB's refusal to act as the lender of last resort. This seems like an affirmation of that.

    If Greece exits the Euro, I wonder if that will embolden other countries to do the same.

  • by zapdrive on 6/28/15, 1:07 PM

    Its times like these that I seriously consider buying more bitcoins. Capital controls are totally unjust, in a free country. And it can happen in any country. The governments need to get their act together, instead of punishing innocent citizens. Why does a centrally controlled currency even need to exist in the first place?

  • by imaginenore on 6/28/15, 11:28 AM

    It's about time. Greece has been behaving like a gambling addict, asking for money to repay the old debts only to waste them in expensive restaurants, buying iPhones, and gambling even more.