Monday, July 6, 2015

Germany Sticks to Hard Line After Greece 'No' Vote

At the New York Times, "Germany Maintains a Hard Line on Greece Debt After Vote":
ATHENS — Germany maintained a hard line with Athens on Monday after Greek voters rejected Europe’s austerity policies in a referendum, intensifying pressure on Prime Minister Alexis Tsipras to restart bailout talks and opening a rift with European countries that appeared more inclined now to consider softening the push for austerity.

As Mr. Tsipras changed his finance minister Monday and laid plans to restart bailout negotiations with creditors, however, it appeared the jubilation that followed the no vote in Greece could fade quickly as signs of financial collapse become more evident.

While the referendum may have lifted Mr. Tsipras’s popularity and bought some time to return to negotiations, Greek banks are almost out of cash and are expected to stay closed for at least several more days, analysts and people close to the situation in Greece said.

The government decided on Monday that a bank holiday scheduled to end Tuesday would now be extended through Wednesday, and a daily cap on A.T.M. withdrawals of 60 euros, about $66, in place since last week, could be tightened. An announcement was expected later in the day. Long lines formed again at cash machines in Athens on Monday as people continued to take out money in dribs and drabs.

The European Central Bank decided Monday to maintain emergency loans to Greek banks at about 89 billion euros, a level that keeps them from failing but will not prevent them from running out of cash they can issue to depositors within a few days.

Ominously, the central bank also said it would tighten requirements for collateral that Greek banks must post in return for loans. The decision means that, even if the European Central Bank decides to increase the lending limit, Greek banks might not have enough collateral needed to qualify for more emergency cash...
Continue reading.