Less than twelve hours after receiving notice of the European Central Bank to cut funding to Greek banks, Prime Minister Alexis Tsipras answered vehemently in a post that seems directed at Mario Draghi but also to all those that put sticks on wheels: “Greece will no longer accept more orders, especially orders received by email,” he asserted from the Greek Parliament in the first session of the SYRIZA parliamentary group.
The ECB announced last night that it will no longer accept Greek government debt as collateral, which de facto means cutting funding for the country and pressing for a new rescue.
The governing body led by Mario Draghi has made the financing option lines more expensive and restrictive. These liquidity has been used by three major Greek banks.
After the ECB decision, the number of investors rejecting Greek debt has soared. The interest given to Greek sovereign securities increased Thursday morning, with 10-year bonds and, above all, two-year bonds being the most affected.
European shares have started to decline, especially Madrid and Milan with a fall of around 0.6% in the Ibex.
Given the financial turmoil, the Greek prime minister has tried to dispel bad omens on the Greek economy: “We guarantee a stop to austerity, but also the country’s future in Europe, we ensure that deposits in Greek banks are fully guaranteed“, said Tsipras.
IMF Expects fresh thoughts from Greece
The International Monetary Fund is one of the largest creditors of Greece debt and therefore it had something to say to Athens, while the head of the economic team toured European capitals along with Tsipras, while he presented his plan to manage the payment of the debt. The IMF says it is willing to discuss their economic policy proposals, but until then avoided speculating about how it will affect its assistance program.
“The form of any agreement will now be subject to discussion with them,” said Thursday the IMF spokesman Gerry Rice, who insisted that so far “there has not been any discussion on specific proposals” to change the frame on which it rests the action of the institution to save Greece from bankruptcy. “We want to hear their ideas and when we do we can be more specific,” he said.
The new Greek Finance Minister, Yanis Varoufakis, had a first touchdown on Saturday in Paris with the responsible of the IMF for Europe, Poul Thomsen. It was short, and no proposals were discussed on debt negotiation or about how to start modifying the framework agreed three years ago.
“It was merely to discuss the challenges facing Greece,” said Rice. Contact between Washington and Athens is happening at a technical level. Meanwhile, Christine Lagarde, the IMF managing director, participated in the meeting with the press.
Lagarde has avoided commenting on the new situation in Greece after the elections. Rice, meanwhile, reiterated that the agency does not want to get ahead of the facts. “We want to see progress from now,” he noted, while made clear that the IMF is “to serve in the best possible way to the members.” Neither commented on the decision of the European Central Bank to cut lending to Athens or on the future of the troika.