European Central Bank: Greece silent support – Times Online

European Central Bank: Greece silent support – Times Online

The ECB has become a major player in the Greek crisis. A role that they never wanted. Today it decides on aid to the Greek banks.

18th February 2015 15:33 clock

ECB President Mario Draghi | © Georges Gobet / AFP / Getty Images

A revolution and not less demands Yanis Varoufakis of the European Central Bank (ECB). The ECB is to reduce the burden of heavily indebted euro zone countries and take over their sovereign debt partially, suggests that the Greek Finance Minister in his book, which these days is published in German. A proposal within the meaning of the German left.

But it would be also a taboo. The central bank would go into the direct government funding – which prohibit strictly European treaties. For the German Finance Minister Wolfgang Schaeuble, even a lawyer, completely inconceivable, incomprehensible, unheard of.

The discussion about the recent Varoufakis proposal and today’s Governing Council meeting in new funding for Greek banks are discussed, tug once again the ECB in the spotlight – even if it is this public presence hardly right. She plays in the current debate over the future of Greece a crucial role

How difficult is the position of the ECB, showing her handling of the Greek banks: since 11 February, she accepts Greek government bonds not more than security to get in return central bank money. Thus the Greek banking system but does not collapse, the Greek central bank must provide the Institute with more money and keep them as alive. The latter received so only money on the so-called ELA emergency loans ( Emergency Liquidity Assistance ). You now have a volume of 65 billion euros, but are still far from the heyday of the crisis.

On Wednesday, the Governing Council, in any form continue this ELA help and if the volume does decide is increased. The extent to which Greek banks need additional assistance, is not yet really clear. Finally, the ECB does not want to unsettle the markets and above all bank customers. The Greek central bank can indeed decided autonomously on the emergency loans. But the Governing Council may appeal a two-thirds majority contradiction. Every two weeks renegotiation of the ELA loans.

So far, the ECB sets the bailouts not as a means of pressuring Greece. In 2013, it was different: the ECB provided at the time the program Cyprus in two modest rows Condition: New PA bailouts’s only in exchange for reforms. It is unclear what happens if Greece officially is no longer a program country. The existing runs from the end of February and so far there is no agreement about what happens next.

The ECB could put in a predicament: they Cuts a early March, emergency care, so as not to be suspected to finance a bankrupt country? What to do when the Greeks even more nervous? Already, about 200 to 300 million euros will be deducted from the bank accounts daily. “The ECB expresses this in an extremely difficult situation,” said Guntram Wolff, head of the Brussels-based think tank Bruegel. “The question of whether the liquidity of the Greek banks should be guaranteed, must answer the policy, not the ECB.” Finally, the ECB is officially “only” for monetary policy in the euro zone, but not for fiscal policy in the Member States responsible.

If the ELA helps cut, then the government should introduce Tsipras capital controls to control the panic over bank counters. Then would regulate how much money may withdraw a maximum of customers in a certain period of time and it would set limits on transfers. “Introduce capital controls and to provide further emergency aid from the ECB, the euro zone would be far cheaper than an exit Greece from the euro,” said the Cypriot economist Marios Zachariadis.