ECB stands with Hellas-bailouts for ever thinner ice – Reuters Germany

       

– Frank Siebelt and Reinhard Becker

       

Frankfurt / Berlin (Reuters) – Only temporary bottleneck or but already bankrupt: Prior to this fundamental question, the ECB stands every time they have a continuation of emergency aid for the clammy Greek financial institutions decide.

       

The longer drags the debt crisis and the more Greece lurches towards state bankruptcy, the more precarious is the situation of the financial institutions. Customers evacuated for fear of a withdrawal of the country from the euro already in droves their accounts empty. Therefore the banks will simply run out of money. According to insiders, the Council of the European Central Bank (ECB) approved ceiling for emergency loans from the current 89 billion euros will soon be exhausted. ECB chief Mario Draghi moves with the ongoing approval of the aid on thin ice.

       

The regulations for the so-called Emergency Liquidity Assistance (ELA) provide that contracts awarded by national central banks at their own risk against collateral ELA loans are granted only to solvent banks with temporary liquidity problems. The ECB acknowledges that the allocation of emergency aid carry specific risks. However, for some critics, the red line has been crossed. Ifo President Hans-Werner Sinn throws Draghi therefore before Insolvenzverschleppung. For the Greek banks were already gone bust. This also applies to the state, says the Munich economist.

        
       

fairly even split in times of crisis?

       

Other economists are far more restrained. The reason: In a general crisis situation, there may be no sharp dividing line between insolvency and liquidity problems. The Bonn economist Martin Hellwig has understanding of the prudent position of the ECB. In the current environment, the maintenance of aids could still pass as a “justified emergency measure”, the director stressed the Max Planck Institute for Research on Collective Goods in a commentary in the “Handelsblatt”: “Without functioning monetary system and the economy does not work, and the life is quickly unbearable. “

       

This concern also drives the Düsseldorf economist Gustav Horn to: “. It could create a herd of misery in Southeast Europe also then you would have to hang expensive utilities,” warned the head of the union-IMK Institute. As long as Greece is but a member of the euro zone, Draghi must make payments. It could take a different approach than in Cyprus, as the monetary authorities more ELA aids necessarily tied in the existence of a rescue program for the island nation in March 2013 the ECB. “The Greek banking sector’s come through the financial crisis. He has come only into trouble, because the state is in trouble,” Horn says.

       

Continued …