plan b looms after greece and europe fall out
Last Updated : GMT 12:34:52
Arab Today, arab today
Arab Today, arab today

'Plan B' looms after Greece and Europe fall out

Arab Today, arab today

Arab Today, arab today 'Plan B' looms after Greece and Europe fall out

A man stands in front of a branch of the Piraeus bank in Athens
Brussels - AFP

With Greece's creditors refusing to extend its bailout, attention has turned swiftly to preventing massive capital flight as worried Greek citizens pull cash from ATMs.

Fears that the banks may not open Monday have prompted the European Central Bank to meet but officials say it will be up to Greece to stem an outflow that has already reached dangerous levels.

"If there isn't capital controls by Tuesday at the latest, it's over," said a European source close to the negotiations.

"Greek banks are near liquidation and can no longer remain solvent. Once the banks fail, 'Grexit' will become irreversible," the source said.

Talks on Saturday collapsed with the Greek contingent leaving the remaining 18 eurozone ministers to consider the consequences of a default.

In a statement, the ministers appeared to urge Greece towards capital controls, saying that the expiry of the bailout "will require measures by the Greek authorities, with the technical assistance of the institutions, to safeguard the stability of the Greek financial system."
The withdrawals today were "exceptionally high," warned the influential German Finance Minister Wolfgang Schaeuble at the talks on Saturday.

Faced with this calamity, Natixis analysts Jesus Castillo and Alan Lemagnen said the Greek government could decide a bank holiday, an order that the nation's banks remain closed to avoid a run by customers.

Similar moves were made in 2013, when Cyprus imposed drastic limitations on cash withdrawals and money transfers abroad when its banks faced crisis -- in large part due to contagion from the crisis in Greece.

- 'Fight contagion' -

"We will do everything to fight against any possible danger of contagion," Schaeuble added.

If the scenario were repeated in Greece now, European leaders would act to prevent the same contagion that flowed from Greece in 2012 to other troubled eurozone members like Spain, Portugal and Ireland.
That disruption was caused by spooked investors shunning the bonds of vulnerable countries, sending their borrowing rates unsustainably high. At the same time, banks in healthier eurozone countries holding debt of weak eurozone nations were suddenly seen as a risk.

But risk of renewed contagion has been greatly reduced by firewalls built since 2010 by eurozone authorities, and the creation of a European banking union to police lenders and oversee a collective response to the crisis.

And in the meantime, most European banks have significantly wound down their exposure to Greece and other troubled eurozone members.

The ECB also now has tools unavailable to it in 2010. It is in the midst of successful quantitive easing programme injecting liquidity into the eurozone economy, and could easily step up its purchases of sovereign bonds if investors dump debt.

It could also deploy the thus far unused "outright monetary transactions" to purchase sovereign debt -- a plan it unveiled in 2012 to calm panicked markets, and which has recently cleared legal challenges from opponents.
Until Saturday's debacle in Brussels, the ECB bought time to allow discussions to continue, pumping cash into the teetering Greek financial system.

To achieve that, the Frankfurt-based central bank maintained its emergency liquidity funding to Greek banks to prevent their collapse -- and in doing so withstood heated opposition from Germany.

So far ECB chief Mario Draghi has refused to cut emergency funding for Greek banks, but that decision is expected to be soon reversed.

The central bank's governing council is set to hold an emergency meeting on Sunday, and a decision to end the lifeline is increasingly expected.

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

plan b looms after greece and europe fall out plan b looms after greece and europe fall out

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

plan b looms after greece and europe fall out plan b looms after greece and europe fall out

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Visit Jamaica for more than just sun

GMT 09:45 2017 Tuesday ,21 November

Visit Jamaica for more than just sun
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today UN warns of conflict in Gaza

GMT 08:39 2017 Tuesday ,21 November

UN warns of conflict in Gaza
Arab Today, arab today Missouri problem mirrors woes

GMT 06:46 2017 Tuesday ,21 November

Missouri problem mirrors woes
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today VW says will invest over 34bn euros

GMT 07:19 2017 Tuesday ,21 November

VW says will invest over 34bn euros
Arab Today, arab today Driverless, electric future just round

GMT 02:45 2017 Monday ,20 November

Driverless, electric future just round
Arab Today, arab today Fedra happy for “Between Two Worlds” success

GMT 09:23 2017 Saturday ,18 November

Fedra happy for “Between Two Worlds” success
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 12:15 2017 Friday ,17 November

Mona Abdel Ghany increased artistic activities

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 02:28 2017 Saturday ,18 November

Anti-drug operation nets 4 tonnes

GMT 03:12 2017 Saturday ,18 November

Prince's vision spurs new Cornwall village

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday