Grexit still haunts – Helsingborgs Dagblad

Grexit still haunts – Helsingborgs Dagblad

Alexis Tsipras and his Finance Minister Yanis Varoufakis have spent weeks at a round trip to the euro zone’s metropolises. Meetings with political heavyweights have succeeded each other.

They both look Greece’s debt of 320 billion (176 percent of GDP) as unsustainable and lenders’ claims on public austerity measures that unreasonable.

But debt settlement , trashed budget targets, stop privatization and deregulation, and plans for higher minimum wages are a hard sell of the lenders. Especially clearly it was in Frankfurt, where the ECB president Mario Draghi after a meeting with Varoufakis explained that Greek bonds will no longer be used as collateral for ECB loans.

The risk of Grexit will be high for several months, think Jan von Gerich, chief strategist at Nordea. The market’s assessment goes in the same direction, with new price developments for Greek banks in Friday’s trading on the Athens Stock Exchange.

– Compared to the new government’s first days in power are the prospects for a compromise a little better. But there is much to be falling into place and Tsipras and Varoufakis still seems to overestimate their bargaining position, he said.

– There is a willingness to negotiate among other eurozone countries. But there is no coherent line, adds Jan von Gerich.

The Road to Grexit goes through Greek banks, which after the ECB’s shock slips week gaining liquidity support from the central bank in Athens. Though the river of withdrawals from Greek banks turns into a so-called banking runaway can also this door closed. It only requires that two-thirds of the ECB’s Executive Board find that the risks in the euro system is getting too large.

When waiting frozen bank accounts, capital controls, and ultimately the central bank in Athens starts to push their own money, which is equal to Grexit.

The Eurozone finance ministers are to Wednesday next week called for an emergency meeting on Greece. German Government has requested up an action plan from Athens. Tsipras’s Office has responded with demands to postpone until May to produce a finished proposal. But late on Friday came a demand from Eurogroup Chairman Jeroen Dijsselbloem that Greece must seek extension of the support program by 16 February.

Meanwhile chose rating agency Standard and Poor’s to lower the country’s rating to B- from B. The Institute is concerned that Chances are that the country’s banks suffer from liquidity problems.