Greece...

Graham_Devon

Greece are now threatening legal action over the words stated today, plus the removal of emergency liquidity.

The first is a tiny bit dodgy, but basically they are suggesting that there is no framework within the rules that allows for a country to be forced out of the EU. This has been backed up several times by the EU themselves when they were teling Greece they couldn't leave as there was no framework to do so.

The second has soemthing a bit more substatial to it. There is a legal duty for the EU to maintain stability to Eurozone countries. The removal of the emergency liquidity apparently breaks the rules of the monetry system. At leas one lawyer appears to be of the same opinion.

Greek officials said they are seriously considering suing the European Central Bank itself for freezing emergency liquidity for the Greek banks at €89bn. It turned down a request from Athens for a €6bn increase to keep pace with deposit flight.

This effectively pulls the plug on the Greek banking system. Syriza claims that this is a prima facie breach of the ECB’s legal duty to maintain financial stability. “How can they justify setting off a run on the Greek banking system?” said one official.

If nothing else it's quite astonishing that one country and one party can effectively be tearing the EU apart like this.

Graham_Devon

And a bit more on Junkers blatant lies earlier stating that there were no pension cuts in the agreement and that the Greek government are playing games....

In fact Brussels wants a cut equal to 1pc of GDP by next year, including a phasing out of the low pension supplement, and other indirect measures.

What's really happening is that Junker was calling for an overthrowing of the Greek government. If it took blatant lies on the world stage to have a crack at it, so be it.

Mortgagefreeman

Graham_Devon wrote: »

Instead, they claim that Greece will simply be in arrears.

I think you'll find it's a cultural thing for Greeks to be in arrears.

HAMISH_MCTAVISH

Graham_Devon wrote: »

There is a legal duty for the EU to maintain stability to Eurozone countries. .

Not quite.

One of the directives of the ECB is to maintain financial stability.

Of course, when that was written, they probably hadn't foreseen that Greece would elect a bat-guano crazy bunch of hard-leftists into power then promptly threaten to default.

I do wish you'd make up your mind Graham, first you hate profligacy so much you want austerity, then you decide you hate the EU more than you hate the profligate, then you hate the EU so much you think Greece should default which loses them EU support, and now you hate the EU so much you think the ECB should continue unlimited liquidity support to a country that is in the process of defaulting....

You're starting to sound remarkably like a Scottish Nationalist...;)

lvader

Graham_Devon wrote: »

The second has soemthing a bit more substatial to it. There is a legal duty for the EU to maintain stability to Eurozone countries. The removal of the emergency liquidity apparently breaks the rules of the monetry system. At leas one lawyer appears to be of the same opinion.

Emergency liquidity hasn't been removed, they didn't take money away, they are simply not giving any more.

Graham_Devon

You keep making all these things up Hamish, it won't make a blind bit of difference.

You blame the greeks for being in debt.

I blame the creditors for piling on debt to people they know will never repay - and wanting to pile even more on to make things "better".

Apparently you appear to believe the only way to save a bankrupt is to lend them even more.

Having said that, your a bit of a fan of pyrmaids. So why should debt pyramids be any different?

Greece has the EU, the IMF and Germany by the gonads for one very simple reason.... I'll let you try and figure that reason out.

Lend to someone whereby there are enough assets to recover the monies, and it's the borrower whos in trouble. Lend several times the total assets of a person and it's the lenders who are in trouble.

Generali

HAMISH_MCTAVISH wrote: »

Not quite.

One of the directives of the ECB is to maintain financial stability.

Of course, when that was written, they probably hadn't foreseen that Greece would elect a bat-guano crazy bunch of hard-leftists into power then promptly threaten to default.

I do wish you'd make up your mind Graham, first you hate profligacy so much you want austerity, then you decide you hate the EU more than you hate the profligate, then you hate the EU so much you think Greece should default which loses them EU support, and now you hate the EU so much you think the ECB should continue unlimited liquidity support to a country that is in the process of defaulting....

You're starting to sound remarkably like a Scottish Nationalist...;)

A problem faced by the EU is, as Tsipras says correctly, is that there is no provision in the EZ treaties for a country to leave, let alone be forced out.

As for turning off the ELA? That may not be seen by the courts as being consistent with maintaining financial stability. After all this cash will be moving via the ECB who it could be argued, perversely IMHO, that the ECB has facilitated the bank run in Greece and thus has a responsibility to ensure liquidity in the Greek banking system.

As the major Greek banks passed the last lot of ECB stress tests they are surely solvent. The ECB's own tests have said so. If that is the case, the effective removal of the ELA is what has caused the banking problems.

My opinion is that the stress tests were a complete crock of poo but what do I know? My betters at the ECB have made a conundrum for themselves.

Generali

Graham_Devon wrote: »

Lend to someone whereby there are enough assets to recover the monies, and it's the borrower whos in trouble. Lend several times the total assets of a person and it's the lenders who are in trouble.

Not if the total debt is chump change. UK QE alone was far more than the total owed by Greece to all creditors and there is no sign of a debt repudiation so far, just a wish to see the debt reduced to something a little more realistic.

tom9980

Meanwhile in a Greek town not near you, the ATM is empty. Everyone wants cash. There is however no panic among locals, the local taverna will simply run loyal customers a tab.

Generali

tom9980 wrote: »

Meanwhile in a Greek town not near you, the ATM is empty. Everyone wants cash. There is however no panic among locals, the local taverna will simply run loyal customers a tab.

That will work in the short term but at some point Coca Cola Hellenic are going to want paying for all the fizzy drinks they've been delivering.