Greece has stressed his willingness to reach agreement in the debt dispute with its euro partners. The country will do everything in its power to reach an agreement on Monday, said a government spokesman said transmitter Skai TV on Friday. “If we have no agreement on Monday, we think that there is still time, so that there will be no problem.” On Monday, the euro zone finance ministers meet again to negotiate the aid to Greece together.
However: as much time as the government spokesman would have us believe that the government in Athens has not. Because the existing utility expires on February 28th. Provides Athens no request to extend the program until the summer, the country is as from 1 March without financial protection shield. At the same time Athens has to spend tens of billions amount until the summer to replace loans. Without additional money that is not possible.
The capital flows from
So far, led by Alexis Tsipras new coalition of the Left Party and right-wing populists, however, the extension of the existing loan program strictly rejects. They still calls for a funding program for the next six months, one end of the Troika monitoring and a haircut, of course – especially in Germany -. Should not be called haircut
The previously unsuccessful running conversations of Europeans with the new government in Greece unsettle Greek citizens who make more money abroad. Experts estimate that around five billion Euros per week will be deducted from the Greek banking system.
Thus, the pressure on the Greek banks is growing immensely. You can no longer obtain the much needed liquidity from the ECB. For much of the collateral of Greek banks consists of sub-prime Greek bonds and government-guaranteed bank bonds since this week is no longer accepts the ECB.
pressure on banks to grow
Greek banks liquidity instead be given mainly by the so-called
ELA emergency loans (Emergency Liquidity Assistance). Just recently, the ECB has raised the limit on ELA loans from 60 to 65 billion euros in a conference call. But the ECB must not and will ELA loans for a longer period only awarded if the solvency of the Greek state is saved. Greece agrees not in the coming weeks with its donors, the country was going around March or April of money.
The default, so the government default would probably occur as early as March. Because then one from the International Monetary Fund (IMF) loan granted over 1.4 billion euros is payable in June 1.4 billion old debts need to be replaced, in July, a 3.5 billion-euro loan from the ECB and national central banks will incur different – total Athens must repay 22.5 billion euros this year.
aids do not arrive
Therein lies the dilemma of the government in Athens: The debt burden is so large that the vast majority of aid loans not reaching the citizen, but must be expended for principal and interest payments of old debts. So far, the euro countries and the International Monetary Fund Greece helped out with around 229 billion euros. Only eleven percent, about 27 billion euros, Athens could spend his state activity, ie pay, for example, police officers, teachers, and pay pensions.
In contrast, Greece spent over 40 billion euros for interest payments. To replace maturing loans, Athens even had to spend € 81 billion. If you add these two values still repayments to the International Monetary Fund in the amount of approximately nine billion euros, is clear: 132 billion euros alone were in debt service. More than half of the total Hellas help.
So far, the markets outside Greece have little response to the worsening of the Greek debt crisis, probably because most investors still assume that in the end – as in previous crises – a compromise will be found and thus the Greek exit from the monetary union this time avoided is.
Only short-term shocks
If the country, however, return to the drachma, it would move the markets, at least in the short term, writes Commerzbank in a short analysis: “Ten-year government bonds should fall in this case once again significantly and thus come close to the zero line on the other hand, the risk premiums would and Italian. Spanish bonds to 200 basis points increase, because the eternal promise of monetary union – it will never be a country exiting the euro – would no longer believed and some investor would fear a repeat of the Greek scenario in another country “
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Destabilization of the European banking system no longer fear the Commerzbank economists, however. “The foreign banks have reduced their claims on Greece since the sovereign debt crisis climax in 2011 massively, from 300 billion to $ 50 billion dollars. Of these, probably a large part hedged by foreign securities. The claims against the Greek State amount to to near zero. The possible losses would be for the foreign banking system as a whole probably acceptable. “
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