The European Central Bank (ECB) was added at pains to downplay the visit. Janis Varoufakis will not be the only Minister of Finance, which one will see later this year at the headquarters of the central bank, it said. On the other hand: Everyday it’s just not that a Greek finance minister visits the ECB president in Frankfurt, before he was with his German counterpart in Berlin
Varoufakis arrived there, while Prime Minister Alexis Tsipras in Brussels with President Jean-Claude Juncker and Council President Donald Tusk language – the actual point of contact for new aid for Greece. Varoufakis’ special interest in a conversation with Mario Draghi is no accident.
The ECB will play in the coming weeks a key role in the wrangling over the Greek Finance , Above all, she has it in her hand, how much time pressure for the government in Athens will be.
After his visit to Draghi Varoufakis spoke of “fertile conversations “and expressed confidence:” The ECB will do whatever is needed to assist the Member States in the euro zone. ” Specific commitments of the monetary authorities, however, it did not lead to. The ECB declined to comment on the content of the meeting not comment.
bond purchases for the time being excluded
As close a donor the central bank of the question anyway. The ECB has adopted a broad-based purchasing program for government bonds. Greek bonds remain but before until further outside. Because the central bank has been buying from earlier programs more than 33 percent of Greek bonds. Above this limit, no new acquisitions are possible, this condition, the Governing Council has set for the new program.
Greek bonds are present, lie in a volume of about 20 billion euros at the central bank, the ECB exact figures will report again only in its annual report. A waiver of repayment of these bonds have ruled repeatedly in recent weeks, several ECB officials.
numbers the Greeks in the summer expiring tranches of bonds back, but would require new purchases by the central bank conceivable. This would facilitate the financing of the Greek state perspective certainly Varoufakis helps but now once not going to fill short-term financial holes.
The key, however, the ECB is the question of whether and how well the Greek banks can stay afloat. Since these in turn are important customers for Greek bonds, it is ultimately the fate of the government. Basically, banks can pledge government bonds as collateral if they borrow money from the ECB. Thus, they can at least partially fund the purchase of government securities indirectly with central bank loans.
However, should the bonds it normally meet credit standards, which Greece has long ceased enough. However, it benefits from an exemption: bonds issued by countries that have an ongoing EU aid program, the central bank accepted regardless of their rating
In return, though. Haircuts due, which, however, has significantly reduced only at the end of the year, but the Governing Council for Greece. After researching the “Welt am Sonntag” gives the Greek banks an additional financial cushion of up to 27 billion euros.
Greek bonds no longer ECB-eligible
That is in reverse as well: Should not Greece to agree with its partners and allow the utility replacement expire at the end of February Greek bonds would no longer ECB-eligible, the banks would on a blow break off their main funding base. End of December they stood at the ECB, with 56 billion euros in debt, more recent figures are not available.
It just benefit the Greek banks currently owned by another special: If you hang up their own bonds with a government guarantee, they may exchange them for fresh money this directly with the ECB. This scheme is in the Governing Council has long been controversial and is actually also expire at the end of February.
In central bank circles there is already speculation about whether this passage renewed again could be. Here, the Council may see scope to accommodate the Greeks, they say. This would the current funding level of Greek banks at least maintained. Condition of course also here: There must be a current utility also after February
ECB risking its credibility
. Varoufakis course is actually about more than an extension of the existing financing options. He was obviously anxious that flows through the central bank more money in his country. But he would like to put on more debt securities with short maturities, called T-bills. So far the Troika permits only one volume of 15 billion euros, and reportedly the ECB will accept only part of this paper as collateral.
The desire of Athens to raise the limit, was issued in central bank circles last a sharp rebuff. Here, the ECB could hardly move, if they did not want to put their credibility on the line, they say. Finally concessions of this kind would a bridge loan for the Greek government alike. For the Greeks, but already had to go to the euro rescue fund ESM -. Where it again, only then would money when Athens agrees with the euro countries on a new program
Should there be no compromise, and thus to any new tool, the Greek banks stood at least not right away because without money. By the ECB they would get without the appropriate securities nothing more. However, the national central bank can provide them with so-called emergency liquidity, hereinafter referred to as central banker jargon Emergency Liquidity Assistance or short ELA.
Greeks pull money from
This emergency loans had played an important role in previous highlights of the Greek crisis. Last year, the situation had finally arrived reassured that the Greek banks got along completely without this instrument.
In the last few weeks has reportedly changed again: Because the nervous customers slowly but surely pull more and more money from their accounts, the banks would have one or the other hole already again have to cram with ELA funds, according to financial circles
Also, this pot of money at the Bank of Greece is certainly not infinite. The Governing Council has a veto power and can stop the audio applications, when he sees too much risk. At least once the central bankers have veto already being used as leverage: Two years ago, the Council Cyprus made it clear that they would not provide further ELA loans more available if the country is not some with the euro countries on a utility. ” / p>
In the case of Greece, such a threat scenario has not been established. Varoufakis probably during his visit to Draghi but scrutinized carefully whether this could change soon.
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