Thursday, January 8, 2015

ECB: Ultimatum to New Greek Government or to EU?

"The continuation of the waiver is based on the technical extension of the European Financial Stability Facility programme until the end of February 2015 and the existence of an International Monetary Fund programme. It is also based on the assumption of a successful conclusion of the current review and an agreement on a follow-up arrangement between the Greek authorities and the European Commission, in liaison with the ECB, and the IMF”.

I cannot interpret this statement by the ECB in any other way than an ultimatum. When the European Central Bank officially goes on record for saying this, there is no imaginable way that they can backtrack from it in the near future.

The question is to whom this is an ultimatum. At first thought, Greece comes to mind. If the new government of Greece does not play ball with the EU, the country's financial sector will fall into the Aegean. So the new Greek government better think twice before it embarks on an irrevocable strategy.

Or is it perhaps an ultimatum to the EU? The EU could easily make the new government play ball. If the new government is SYRIZA-led, all the EU would have to do is to fulfill all of SYRIZA's demands.

Whatever the case may be, this statement has definitely added seriousness to some of the mutual bluffing of recent days. There is now a line drawn in the sand and this line seems unsurmountable.


  1. I had mentioned the cypriot scenario eslewhere, Mr. Kastner, hadn't i...
    Yes, basically the ECB says "no memorandum, no ECB liquidity to greek banks".
    This doesn't come as surprise to anyone in Greece really. Already in the past 2 days, 1,2 beur have been withdrawed from banks, because people were expecting the cypriot blackmail to repeat.

  2. Here it is: originally, the estimates were that 600 meur were withdrawn from greek banks on Monday. Today's data bring that to 900 meur. On Wednesday , 500 meur were withdrawn from the banks.

    Μr. Kastner, Merkel saw that mediatically, threatening Greece isn't useful. If anything, if you read southern european press and reader's comments, you will see a huge anti-Merkel reaction. So, plan B, is let the ECB do the boogeyman.

  3. @AnonymousJanuary 8, 2015 at 12:35 PM

    Imho it is not Merkel or Germany to be blamed. The rules regarding financial help by ECB have long been known.

    I am convinced that the statement of ECB cited by Klaus is 75% addressed to the EU government because the ECB knows for a long period of time that the current muddling will pretty soon fail.
    The remaining 25% go to the future Greek government, regardless of what party will win the election...


    1. Mr. Trickler,

      You will pardon me for being suspicious, but i always find it odd that everyone comes out to say "long know rules", a few days before the greek elections. It's not like the greek officials don't know them either or that the greek officials don't have ways to be informed in case they have forgotten, since Stournaras, head of the Bank of Greece, was in the meeting too.
      So, i am a bit forced to believe that, just by coincidence, the ECB decides to make this statement now.
      As far as Greece is concerned, this statement is only seen as help to Samaras.

  4. Sorry to all but i do not see the above statement as an ultimatum. It is a straight foward laconic statement. In lamens terms is says, "the three of you work it out." There is no , "or else." "just work it out."

    Come end february they will work it out as the previously agreed plan. I'll agree with Trangas one one point. Syriza will come, will get a small debt relief, interest reduction and terms of payment adjustment. In return the programme will continue and new austerities will be implemented but in new directions.

    As for blatant information of bank withdrawls does not mean anything. Passing on "empty" information. ok withdrawls were made. can you tell me how many deposits were made? Any body can say anythng and distort facts. Facts this period will most certainly be distorted to affect vote leverage.

    Read between lines and try to have opinions of your own. not propaganda slaves.