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Greece faces growing risk of capital controls, with IMF repayment in doubt - live updates Greece faces growing risk of capital controls, with IMF repayment in doubt - live updates
(35 minutes later)
12.38pm BST12:38
Reuters is reporting that Greece has suggested bringing in a transaction tax on bank customers:
There were reports earlier this month that Greece could impose a small levy when people accessed their accounts, to deter a bank run and to raise funds.
12.33pm BST12:33
NYT publishes profile of Yanis Varoufakis
The New York Times has just published a profile of Yanis Varoufakis today, which gives a detailed, sympathetic picture of the challenges facing Greece’s finance minister.
I think it’s appearing in next Saturday’s NYT magazine; but we can read it now.
Here’s a flavour:
Imagine that President Obama had, instead of picking Timothy Geithner to be his Treasury secretary in the midst of the financial crisis, appointed a progressive academic economist like Paul Krugman or Joseph Stiglitz, only edgier and funnier, someone who had spoken out scathingly against bank bailouts, freely expressing himself however he wanted on television and in public debates because he wasn’t running for office....
NYT: Tsipras' appointing Varoufakis as a Greek Finance Minister is like Obama appointing Stiglitz or Krugman. http://t.co/Nv5vGWEJc5
The interview begins with Varoufakis showing frustration with his European colleagues over their refusal to cut a new deal:
The Greek finance minister had just returned to Athens from a hopscotch tour of European capitals, during which he warned his fellow European leaders that they faced a Continental crisis: If they didn’t lend money to his ailing country soon, Greece might end up forced to leave the eurozone. And yet Greece wouldn’t accept many of the conditions they were demanding in return. He sounded angry. “I’ll be damned if I will accept another package of economic policies that perpetuate this same crisis. This is not what I was elected for.”
He would resign, he said, rather than push the Greek people deeper into economic despair: “It’s not good for Europe, and it’s not good for Greece.”
And the Marxist professor (surprisingly?) even compared his challenge to Conservative PM Margaret Thatcher:
From the European point of view, Greece has no right at all to argue about reforms, so utterly did previous governments, after torpedoing their own economy, fail to implement them over the past five years. But Varoufakis and Syriza regard their election as a sort of “Day Zero” for Greece. “We are the guys who spent all our lives in Syntagma Square outside my office protesting what the people inside my office were doing,” Varoufakis said. “We were being bombarded with gas, because we didn’t see how we could repay a loan under the circumstances.”
He compared himself to Margaret Thatcher, elected in 1979 in opposition to the welfare state. “How intelligent is it to blame Margaret Thatcher for the postwar corporatism that came before her?” he asked. “Not much. So what we have here is a serious case of deeply rooted racism that all Greeks are the same, that whether or not they protested the bailout, they are still responsible for it.”
Worth a read:
A Finance Minister Fit for a Greek Tragedy?
11.53am BST11:5311.53am BST11:53
Greek PM could face left-wing mutinyGreek PM could face left-wing mutiny
Helena SmithHelena Smith
Over in Athens there is mounting speculation that prime minister Alexis Tsipras is struggling to control his increasingly fractious far left Syriza party.Over in Athens there is mounting speculation that prime minister Alexis Tsipras is struggling to control his increasingly fractious far left Syriza party.
Helena Smith reportsHelena Smith reports
There are growing suggestions in Athens this morning that Alexis Tsipras may soon be dealing with a full-scale mutiny within the ranks of his radical left party.There are growing suggestions in Athens this morning that Alexis Tsipras may soon be dealing with a full-scale mutiny within the ranks of his radical left party.
Last night, John Milios, the party’s chief economist who played a leading role in drawing up Syriza’s manifesto, spoke excoriatingly of the concessions the government was now making to strike a deal with lenders.Last night, John Milios, the party’s chief economist who played a leading role in drawing up Syriza’s manifesto, spoke excoriatingly of the concessions the government was now making to strike a deal with lenders.
“We have to help Syriza stay with its pre-election commitments,” he told a gathering of leftist dissidents in Athens before exerting heavy criticism of the strategy pursued by finance minister Yanis Varoufakis.“We have to help Syriza stay with its pre-election commitments,” he told a gathering of leftist dissidents in Athens before exerting heavy criticism of the strategy pursued by finance minister Yanis Varoufakis.
“The party can’t have its feet in two boats.”“The party can’t have its feet in two boats.”
Default, he added, would be preferable and would not have any bearing on Greece’s place in the euro zone.Default, he added, would be preferable and would not have any bearing on Greece’s place in the euro zone.
Tsipras was forced to address his parliamentary group for over five hours yesterday with increasingly divisive MPs arguing that a split from the eurozone, and a return to the drachma, would be infinitely more sensible than years of “dead-end austerity.”Tsipras was forced to address his parliamentary group for over five hours yesterday with increasingly divisive MPs arguing that a split from the eurozone, and a return to the drachma, would be infinitely more sensible than years of “dead-end austerity.”
The infighting is such that even if a deal is eventually reached with creditors there are real – and growing questions - over the ability of the government to enforce it.The infighting is such that even if a deal is eventually reached with creditors there are real – and growing questions - over the ability of the government to enforce it.
“If he can’t get it through [parliament], and his people don’t vote for it, we will have a serious crisis,” the New Democracy MP Anna Assimakopoulou told me.“If he can’t get it through [parliament], and his people don’t vote for it, we will have a serious crisis,” the New Democracy MP Anna Assimakopoulou told me.
“Failure to support it will bring up questions of implementation and the stability of the political system. I don’t think lenders are going to give up money if they think the government is going to fall,” added Assimakopoulou, a shadow finance minister for the main opposition New Democracy.“Failure to support it will bring up questions of implementation and the stability of the political system. I don’t think lenders are going to give up money if they think the government is going to fall,” added Assimakopoulou, a shadow finance minister for the main opposition New Democracy.
“The big question is can Tsipras strike a deal inside his own party when so many are now speaking openly about the benefits of going back to the drachma? Personally, I seriously doubt that they can find an internal, workable compromise.”“The big question is can Tsipras strike a deal inside his own party when so many are now speaking openly about the benefits of going back to the drachma? Personally, I seriously doubt that they can find an internal, workable compromise.”
Syriza’s militant Left Platform, lead by energy minister Panagiotis Lafazanis, has also been racheting up the pressure.Syriza’s militant Left Platform, lead by energy minister Panagiotis Lafazanis, has also been racheting up the pressure.
On Tuesday, the radicals’ news portal, ISKRA, lashed out at the concessions being made in a story headlined “lenders are preparing plans for the unprecedented submission of the country.”On Tuesday, the radicals’ news portal, ISKRA, lashed out at the concessions being made in a story headlined “lenders are preparing plans for the unprecedented submission of the country.”
“They are preparing ultimatums of the kind “take it or leave it,” it said, adding that the debt-stricken country was being economically asphyxiated to force its hand.“They are preparing ultimatums of the kind “take it or leave it,” it said, adding that the debt-stricken country was being economically asphyxiated to force its hand.
It added:It added:
“An agreement with the “institutions will either comply with the government’s programme or it can’t happen, and it that case it won’t happen.”“An agreement with the “institutions will either comply with the government’s programme or it can’t happen, and it that case it won’t happen.”
Updated at 11.54am BSTUpdated at 11.54am BST
11.37am BST11:3711.37am BST11:37
Moody's: Risk of Greek capital controls has risenMoody's: Risk of Greek capital controls has risen
The risk of Greece freezing bank accounts and imposing restrictions on the movement of money has “materially increased” in the last few weeks, rating agency Moody’s has just warned.The risk of Greece freezing bank accounts and imposing restrictions on the movement of money has “materially increased” in the last few weeks, rating agency Moody’s has just warned.
Moody’s fears that the outlook for the Greek banking sector is “negative”, due to the “significant deterioration in banks’ funding and liquidity”.Moody’s fears that the outlook for the Greek banking sector is “negative”, due to the “significant deterioration in banks’ funding and liquidity”.
Moody’s says:Moody’s says:
The outlook for the Greek banking system is negative, primarily reflecting the acute deterioration in Greek banks’ funding and liquidity, says Moody’s Investors Service in a new report published recently.The outlook for the Greek banking system is negative, primarily reflecting the acute deterioration in Greek banks’ funding and liquidity, says Moody’s Investors Service in a new report published recently.
These pressures are unlikely to ease over the next 12-18 months and there is a high likelihood of an imposition of capital controls and a deposit freeze.These pressures are unlikely to ease over the next 12-18 months and there is a high likelihood of an imposition of capital controls and a deposit freeze.
They also warns that Greece’s banks will remain dependent on central bank help for some time:They also warns that Greece’s banks will remain dependent on central bank help for some time:
Moody’s notes that significant deposit outflows of more than €30 billion since December 2014 have increased banks’ dependence on central bank funding. In our view, the banks are likely to remain highly dependent on central bank funding, as ongoing uncertainty regarding Greece’s support programme continues to compromise depositors’ confidence.Moody’s notes that significant deposit outflows of more than €30 billion since December 2014 have increased banks’ dependence on central bank funding. In our view, the banks are likely to remain highly dependent on central bank funding, as ongoing uncertainty regarding Greece’s support programme continues to compromise depositors’ confidence.
*MOODY'S: PRESSURES ON GREEK BANKING UNLIKELY TO EASE 12-18 MOS*MOODY'S: PRESSURES ON GREEK BANKING UNLIKELY TO EASE 12-18 MOS
Updated at 11.45am BSTUpdated at 11.45am BST
11.11am BST11:1111.11am BST11:11
Greek finance minister Yanis Varoufakis has now published a transcript of his interview with Die Zeit (see earlier post).Greek finance minister Yanis Varoufakis has now published a transcript of his interview with Die Zeit (see earlier post).
It shows Varoufakis described Wolfgang Schauble as a “legendary” figure...although one whose view of the crisis should be challenged.It shows Varoufakis described Wolfgang Schauble as a “legendary” figure...although one whose view of the crisis should be challenged.
And although he does believe the German finance minister makes mistakes, Varoufakis had the grace to admit the feeling is mutual.And although he does believe the German finance minister makes mistakes, Varoufakis had the grace to admit the feeling is mutual.
1. If you would explain to a teenager, maybe your own daughter, what your relationship to the German Finance Minister Wolfgang Schäuble looks like – what would you tell her?1. If you would explain to a teenager, maybe your own daughter, what your relationship to the German Finance Minister Wolfgang Schäuble looks like – what would you tell her?
YV: I would tell my daughter that it is, from my perspective, a multi-layered relationship. There is a sense of awe that I feel from meeting with a legendary figure whose work I have been following critically for decades. Then there is a strong urge to counter his overarching approach to common problems regarding Europe. Additionally, there is some frustration at not having the opportunity to discuss in a different setting; to stage these meetings in a proper federal, democratic context in which arguments, rather than relative power, would play a more prominent role.YV: I would tell my daughter that it is, from my perspective, a multi-layered relationship. There is a sense of awe that I feel from meeting with a legendary figure whose work I have been following critically for decades. Then there is a strong urge to counter his overarching approach to common problems regarding Europe. Additionally, there is some frustration at not having the opportunity to discuss in a different setting; to stage these meetings in a proper federal, democratic context in which arguments, rather than relative power, would play a more prominent role.
2. What are the European topics you probably could agree on with Mr Schäuble?2. What are the European topics you probably could agree on with Mr Schäuble?
YV: That Europe needs a political union and that, without it, our monetary union is problematic.YV: That Europe needs a political union and that, without it, our monetary union is problematic.
3. Do you think Mr Schäuble makes mistakes in his analysis of the Greek situation? If yes, which ones?3. Do you think Mr Schäuble makes mistakes in his analysis of the Greek situation? If yes, which ones?
YV: Yes I do (as I am sure he thinks that I err in my analysis). Primarily, he associates past Greek governments with the Greek people; as if the former reflect the character of the latter. And he does not appreciate how helpful it would be for mainstream Northern Europe to find a modus vivendi with a movement (like SYRIZA in Greece) which may be very critical of European institutions but which is profoundly pro-European and eager to help bring Europe closer together.YV: Yes I do (as I am sure he thinks that I err in my analysis). Primarily, he associates past Greek governments with the Greek people; as if the former reflect the character of the latter. And he does not appreciate how helpful it would be for mainstream Northern Europe to find a modus vivendi with a movement (like SYRIZA in Greece) which may be very critical of European institutions but which is profoundly pro-European and eager to help bring Europe closer together.
My answers (verbatim) to Die Zeit on Dr Schäuble http://t.co/l4kOBFGqhTMy answers (verbatim) to Die Zeit on Dr Schäuble http://t.co/l4kOBFGqhT
Updated at 11.25am BSTUpdated at 11.25am BST
11.06am BST11:0611.06am BST11:06
Investors just paid for the privilege of lending money to Portugal, suggesting investors aren’t panicking about an anti-austerity government winning power this autumn.Investors just paid for the privilege of lending money to Portugal, suggesting investors aren’t panicking about an anti-austerity government winning power this autumn.
The Lisbon debt agency just sold €300m of six-month Treasury bills at an average yield of -.002%.The Lisbon debt agency just sold €300m of six-month Treasury bills at an average yield of -.002%.
That means buyers will make a tiny loss when the bonds mature in November -- unless they manage to sell them to the European Central Bank’s QE programme, of course.That means buyers will make a tiny loss when the bonds mature in November -- unless they manage to sell them to the European Central Bank’s QE programme, of course.
Portugal joining the party. *PORTUGAL SELLS 6-MONTH BILLS AT NEGATIVE YIELD FOR 1ST TIMEPortugal joining the party. *PORTUGAL SELLS 6-MONTH BILLS AT NEGATIVE YIELD FOR 1ST TIME
Portugal sells 6 month T-Bills at a negative yield. Is this the same Portugal that might be electing an anti austerity gov't in October?Portugal sells 6 month T-Bills at a negative yield. Is this the same Portugal that might be electing an anti austerity gov't in October?
10.38am BST10:3810.38am BST10:38
In another sign of rising tensions, Greek pensioners are holding an anti-austerity protest in Athens, against cuts to welfare and healthcare.In another sign of rising tensions, Greek pensioners are holding an anti-austerity protest in Athens, against cuts to welfare and healthcare.
The demonstration, which looks peaceful, could be a taste of what’s to come if Greece is forced to implement more cutbacks by its lenders.The demonstration, which looks peaceful, could be a taste of what’s to come if Greece is forced to implement more cutbacks by its lenders.
10.21am BST10:2110.21am BST10:21
Varoufakis: Schäuble make mistakes, and it's frustratingVaroufakis: Schäuble make mistakes, and it's frustrating
Greek finance minister Yanis Varoufakis has apparently told a German newspaper that his counterpart, Wolfgang Schäuble, makes mistakes in his analysis of Greece.Greek finance minister Yanis Varoufakis has apparently told a German newspaper that his counterpart, Wolfgang Schäuble, makes mistakes in his analysis of Greece.
Reuters reports:Reuters reports:
The left-wing economist, asked by Die Zeit in excerpts of an interview to be published on Thursday whether the conservative finance German minister commits such mistakes, answered: “Yes, he does.”The left-wing economist, asked by Die Zeit in excerpts of an interview to be published on Thursday whether the conservative finance German minister commits such mistakes, answered: “Yes, he does.”
Varoufakis added:Varoufakis added:
“It is frustrating that we are not able to speak with each other in a context where arguments count more than relative power.”“It is frustrating that we are not able to speak with each other in a context where arguments count more than relative power.”
That’s the difference between politics and academia, I guess.That’s the difference between politics and academia, I guess.
It’s not clear which particularly errors Varoufakis has in mind. These comments may not improve relations between Athens and Berlin at this critical time.It’s not clear which particularly errors Varoufakis has in mind. These comments may not improve relations between Athens and Berlin at this critical time.
In case a Greek deal wasn't hard enough @yanisvaroufakis gives interview: *SCHAEUBLE'S ANALYSIS OF GREECE IS FLAWED, VAROUFAKIS TELLS ZEITIn case a Greek deal wasn't hard enough @yanisvaroufakis gives interview: *SCHAEUBLE'S ANALYSIS OF GREECE IS FLAWED, VAROUFAKIS TELLS ZEIT
This @yanisvaroufakis interview with Die Zeit is something else. Quite personal. *VAROUFAKIS SAYS SCHAEUBLE EMPHASIZING POWER OVER ARGUMENT:This @yanisvaroufakis interview with Die Zeit is something else. Quite personal. *VAROUFAKIS SAYS SCHAEUBLE EMPHASIZING POWER OVER ARGUMENT:
Updated at 10.23am BSTUpdated at 10.23am BST
10.14am BST10:1410.14am BST10:14
A second Greek government representative has now declared that Athens will miss its €305m repayment to the IMF early next month, unless a deal is reached.A second Greek government representative has now declared that Athens will miss its €305m repayment to the IMF early next month, unless a deal is reached.
Thanassis Petrakos, Syriza’s parliamentary spokesman, echoed Nikos Filis’s comments this morning, on Star TV.Thanassis Petrakos, Syriza’s parliamentary spokesman, echoed Nikos Filis’s comments this morning, on Star TV.
Petrakos also argued that Greece wouldn’t suffer if it failed to pay up, according to Twitter user The Greek Analyst who tweeted the key points:Petrakos also argued that Greece wouldn’t suffer if it failed to pay up, according to Twitter user The Greek Analyst who tweeted the key points:
Both parliamentary spokesmen of #Syriza, Filis & Petrakos, repeated this morning (different shows) that govt might actually not pay IMF.Both parliamentary spokesmen of #Syriza, Filis & Petrakos, repeated this morning (different shows) that govt might actually not pay IMF.
#Syriza spox Petrakos replies: "What can happen to us [if we don't pay the IMF]? Nothing is going to happen to us!" #Greece#Syriza spox Petrakos replies: "What can happen to us [if we don't pay the IMF]? Nothing is going to happen to us!" #Greece
These. People. Are. Dangerously. Foolish. #GreeceThese. People. Are. Dangerously. Foolish. #Greece
Updated at 10.30am BSTUpdated at 10.30am BST
9.41am BST09:419.41am BST09:41
Britain’s central bank can’t agree whether wage are going to rise strongly, or not.Britain’s central bank can’t agree whether wage are going to rise strongly, or not.
This is the key bit of the MPC minutes. Pay growth & inflation might pick up quickly... Or they might not... pic.twitter.com/8FyR96ZeQWThis is the key bit of the MPC minutes. Pay growth & inflation might pick up quickly... Or they might not... pic.twitter.com/8FyR96ZeQW
9.39am BST09:399.39am BST09:39
The Bank of England also believes UK economic growth will accelerate this quarter, after slowing to just 0.3% in the first three months of 2015.The Bank of England also believes UK economic growth will accelerate this quarter, after slowing to just 0.3% in the first three months of 2015.
The minutes say:The minutes say:
The Committee judged that GDP growth would pick up in Q2 to close to its historical average rate, supported by the boost to real incomes from the fall in food, energy and other import prices, and would continue to grow at, or just a little below, historical average rates throughout the forecast period.The Committee judged that GDP growth would pick up in Q2 to close to its historical average rate, supported by the boost to real incomes from the fall in food, energy and other import prices, and would continue to grow at, or just a little below, historical average rates throughout the forecast period.
9.37am BST09:379.37am BST09:37
Bank of England minutes releasedBank of England minutes released
The Bank of England’s monetary policy committee was unanimous in voting to leave interest rates unchanged this month, according to the minutes of the meeting which were just released.The Bank of England’s monetary policy committee was unanimous in voting to leave interest rates unchanged this month, according to the minutes of the meeting which were just released.
However, the decision of whether to hold or raise Bank Rate was “finely balanced” for two MPC members.However, the decision of whether to hold or raise Bank Rate was “finely balanced” for two MPC members.
That’s probably Martin Weale and Ian McCafferty, who recently stopped voting for a rate rise once they realised that inflation was falling really quite sharply (to -0.1% last month).That’s probably Martin Weale and Ian McCafferty, who recently stopped voting for a rate rise once they realised that inflation was falling really quite sharply (to -0.1% last month).
The minutes also show that the MPC is confident that borrowing costs will rise in the medium term, having been pegged at 0.5% since March 2009:The minutes also show that the MPC is confident that borrowing costs will rise in the medium term, having been pegged at 0.5% since March 2009:
While there was a range of views over the most likely future path for Bank Rate, all members agreed that it was more likely than not that Bank Rate would rise over the three-year forecast period.While there was a range of views over the most likely future path for Bank Rate, all members agreed that it was more likely than not that Bank Rate would rise over the three-year forecast period.
The minutes are online here:The minutes are online here:
Minutes of the MPC Meeting held on 7 and 8 May http://t.co/23rf87VcTRMinutes of the MPC Meeting held on 7 and 8 May http://t.co/23rf87VcTR
Updated at 9.37am BSTUpdated at 9.37am BST
9.16am BST09:169.16am BST09:16
Europe’s stock markets are rather becalmed this morning, as the Greek crisis continues to worry traders.Europe’s stock markets are rather becalmed this morning, as the Greek crisis continues to worry traders.
Most of the major indices are slightly in the red:Most of the major indices are slightly in the red:
The Athens stock market has also dipped, down 0.2% in early trading.The Athens stock market has also dipped, down 0.2% in early trading.
Stan Shamu of IG says:Stan Shamu of IG says:
Unfortunately Greece remained a thorn with no positive developments and reduced expectations of a swift solution.Unfortunately Greece remained a thorn with no positive developments and reduced expectations of a swift solution.
In London, Burberry’s share have slid 4% after the fashion chain cut its profit forecasts for 2016 and blamed currency fluctuations.In London, Burberry’s share have slid 4% after the fashion chain cut its profit forecasts for 2016 and blamed currency fluctuations.
It was a better day in Japan, where the Nikkei touched a 15-year high. That followed the news that the Japanese economy grew by 0.6% in the last quarter (an annualised rate of 2.4%). That beat expectations, and also outperformed the US, the UK and the eurozone.It was a better day in Japan, where the Nikkei touched a 15-year high. That followed the news that the Japanese economy grew by 0.6% in the last quarter (an annualised rate of 2.4%). That beat expectations, and also outperformed the US, the UK and the eurozone.
9.00am BST09:009.00am BST09:00
Moscovici: Still big gaps to close with GreeceMoscovici: Still big gaps to close with Greece
We’re making progress with Greece, but we’re not there yet.We’re making progress with Greece, but we’re not there yet.
That’s the message from Pierre Moscovici, European commissioner for Economic and Monetary Affairs, this morning.That’s the message from Pierre Moscovici, European commissioner for Economic and Monetary Affairs, this morning.
Speaking in Paris a few moments ago, Moscovici said that negotiations are advancing, but they need to accelerate.Speaking in Paris a few moments ago, Moscovici said that negotiations are advancing, but they need to accelerate.
Worryingly, he also warns that pensions and labour market issues remain unresolved -- those are the red lines which Greece is sticking to.Worryingly, he also warns that pensions and labour market issues remain unresolved -- those are the red lines which Greece is sticking to.
8.41am BST08:418.41am BST08:41
Greece’s governing Syriza party has called a rally in Paris tonight, to show support for Athens in its battle with its creditors.Greece’s governing Syriza party has called a rally in Paris tonight, to show support for Athens in its battle with its creditors.
The event, at 18:30 in Republic Square, will call on Greece’s lenders to respect its “red lines”; the promises on pensions and labour market reforms, ahead of an EU summit tomorrow in Riga, Latvia.The event, at 18:30 in Republic Square, will call on Greece’s lenders to respect its “red lines”; the promises on pensions and labour market reforms, ahead of an EU summit tomorrow in Riga, Latvia.
That summit meeting will be “a decisive meeting in the political confrontation between austerity and social justice, between neo-liberalism and democracy in Europe”, they say. More details here.That summit meeting will be “a decisive meeting in the political confrontation between austerity and social justice, between neo-liberalism and democracy in Europe”, they say. More details here.
SYRIZA calls for a "Avec les Grecs" (together with Greeks) rally today in Paris, #France in place de la République. http://t.co/ts36jIYoOSSYRIZA calls for a "Avec les Grecs" (together with Greeks) rally today in Paris, #France in place de la République. http://t.co/ts36jIYoOS
It seems that SYRIZA is trying to re-ignite people's support across Europe in head of the #eurogroup negotiation #greece #previoustweetIt seems that SYRIZA is trying to re-ignite people's support across Europe in head of the #eurogroup negotiation #greece #previoustweet
8.28am BST08:288.28am BST08:28
Investors are bracing for Greece to miss its €305m repayment to the IMF on June 5, says Mike van Dulken of Accendo Markets.Investors are bracing for Greece to miss its €305m repayment to the IMF on June 5, says Mike van Dulken of Accendo Markets.
In Europe this morning indications are that, while there has been progress in negotiations, Greece will miss its June debt payment to the IMF unless a deal is reached by the end of May.In Europe this morning indications are that, while there has been progress in negotiations, Greece will miss its June debt payment to the IMF unless a deal is reached by the end of May.
Concessions for Greece are highly unlikely - the EU will almost certainly face a second revolt in the form of Portugal’s ascendant socialists if any are afforded to Athens.Concessions for Greece are highly unlikely - the EU will almost certainly face a second revolt in the form of Portugal’s ascendant socialists if any are afforded to Athens.
Portugal holds a general election this autumn, and opinion polls show the opposition Socialists holding a small lead. Their leader, Antonio Costa, has vowed to reverse the austerity measures imposed since its 2011 bailout, suggesting the eurozone crisis could flare again soon.....Portugal holds a general election this autumn, and opinion polls show the opposition Socialists holding a small lead. Their leader, Antonio Costa, has vowed to reverse the austerity measures imposed since its 2011 bailout, suggesting the eurozone crisis could flare again soon.....
8.20am BST08:208.20am BST08:20
The foreign-exchange rigging scandal took another twist this morning.The foreign-exchange rigging scandal took another twist this morning.
Swiss bank UBS revealed it had dodged being prosecuted by the US Department of Justice...because it blew the whistle that traders had been conspiring to fix the rates at which currencies were changing hands.Swiss bank UBS revealed it had dodged being prosecuted by the US Department of Justice...because it blew the whistle that traders had been conspiring to fix the rates at which currencies were changing hands.
Other banks could be hit with big fines today, as City editor Jill Treanor explains:Other banks could be hit with big fines today, as City editor Jill Treanor explains:
The announcement from UBS signals that the US DoJ is preparing to impose punishments on other banks – including Barclays and bailed-out Royal Bank of Scotland – as soon as Wednesday. Barclays is also awaiting punishment from the FCA and has already prepared the ground for penalties of as much as £2bn.The announcement from UBS signals that the US DoJ is preparing to impose punishments on other banks – including Barclays and bailed-out Royal Bank of Scotland – as soon as Wednesday. Barclays is also awaiting punishment from the FCA and has already prepared the ground for penalties of as much as £2bn.
The punishments, also expected on two US banks, could result in total penalties of over £3bn and require the banks to plead guilty to offences relating to manipulating foreign exchange markets – a sanction rarely imposed by the DoJThe punishments, also expected on two US banks, could result in total penalties of over £3bn and require the banks to plead guilty to offences relating to manipulating foreign exchange markets – a sanction rarely imposed by the DoJ
Related: UBS facing £350m in fines as banks hit with fresh sanctions for forex riggingRelated: UBS facing £350m in fines as banks hit with fresh sanctions for forex rigging
8.09am BST08:098.09am BST08:09
The euro fell sharply following the warning that Greece could miss its repayment to the IMF on June 5.The euro fell sharply following the warning that Greece could miss its repayment to the IMF on June 5.
It hit a two week low against the US dollar at $1.107.It hit a two week low against the US dollar at $1.107.
Updated at 8.09am BSTUpdated at 8.09am BST
8.03am BST08:038.03am BST08:03
Greece will prioritise pensions and wages rather than repaying the IMF, if creditors don’t unlock some of the €7.2bn in outstanding bailout funds, added Nikos Filis.Greece will prioritise pensions and wages rather than repaying the IMF, if creditors don’t unlock some of the €7.2bn in outstanding bailout funds, added Nikos Filis.
“There is no money for the foreign (lenders) when they have not given us any funds for a year...We don’t have it to make the payment and this is part of the discussion.”“There is no money for the foreign (lenders) when they have not given us any funds for a year...We don’t have it to make the payment and this is part of the discussion.”
7.54am BST07:547.54am BST07:54
Greece: No IMF repayment without a dealGreece: No IMF repayment without a deal
The Greek government has warned that it will miss its next repayment to the International Monetary Fund unless a deal is reached soon.The Greek government has warned that it will miss its next repayment to the International Monetary Fund unless a deal is reached soon.
Nikos Filis, the government’s parliamentary speaker, raised the stakes in its negotiations with its lenders this morning.Nikos Filis, the government’s parliamentary speaker, raised the stakes in its negotiations with its lenders this morning.
He told the ANT1 TV station that the IMF won’t get the €305m due in a fortnight’s time, unless creditors have unlocked some bailout funds.He told the ANT1 TV station that the IMF won’t get the €305m due in a fortnight’s time, unless creditors have unlocked some bailout funds.
“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5.“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5.
“If there is no deal by then that will address the current funding problem, they won’t get any money.”“If there is no deal by then that will address the current funding problem, they won’t get any money.”
(thanks to Reuters for the quotes)(thanks to Reuters for the quotes)
Filis’s comments could reverberate around the European Central Bank’s HQ in Frankfurt, as the governing council meets to discuss the crisis.Filis’s comments could reverberate around the European Central Bank’s HQ in Frankfurt, as the governing council meets to discuss the crisis.
GREECE WILL NOT MAKE JUNE 5 IMF LOAN REPAYMENT IF NO DEAL WITH LENDERS IS REACHED BY THEN- GOVT PARLIAMENTARY SPEAKER - RTRSGREECE WILL NOT MAKE JUNE 5 IMF LOAN REPAYMENT IF NO DEAL WITH LENDERS IS REACHED BY THEN- GOVT PARLIAMENTARY SPEAKER - RTRS
This echo a warning from Greece’s Labour minister Panos Skourletis. As we covered in Tuesday’s liveblog, Skourletis warned that “things will be difficult” if Greece hits June without a deal.This echo a warning from Greece’s Labour minister Panos Skourletis. As we covered in Tuesday’s liveblog, Skourletis warned that “things will be difficult” if Greece hits June without a deal.
A glance at Greece’s repayment schedule confirms that June will be very sticky unless the two sides have reached agreement....A glance at Greece’s repayment schedule confirms that June will be very sticky unless the two sides have reached agreement....
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The Agenda: ECB to discuss Greek support todayThe Agenda: ECB to discuss Greek support today
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The European Central Bank will hold the fate of Greece’s banking system in its hands today.The European Central Bank will hold the fate of Greece’s banking system in its hands today.
The 25 members of the ECB’s governing council will discuss whether to keep pumping emergency liquidity into Greek banks to keep them afloat. They might decide to impose a higher haircut on the assets provided by the Bank of Greece in return for this support.The 25 members of the ECB’s governing council will discuss whether to keep pumping emergency liquidity into Greek banks to keep them afloat. They might decide to impose a higher haircut on the assets provided by the Bank of Greece in return for this support.
According to the Financial Times, this is a serious possibility:According to the Financial Times, this is a serious possibility:
It is possible that two thirds of the council will support the move as soon as the Wednesday vote.It is possible that two thirds of the council will support the move as soon as the Wednesday vote.
The haircuts were lowered last year after Greece returned to capital markets. The council is considering returning to the levels applied before the reduction, according to two people familiar with the matter.The haircuts were lowered last year after Greece returned to capital markets. The council is considering returning to the levels applied before the reduction, according to two people familiar with the matter.
This would lower the level of collateral held by Greek banks eligible for emergency loans from €95bn to €88bn and is viewed by insiders as a relatively incremental shift.This would lower the level of collateral held by Greek banks eligible for emergency loans from €95bn to €88bn and is viewed by insiders as a relatively incremental shift.
At the moment, Greek banks can access €80bn of liquidity.At the moment, Greek banks can access €80bn of liquidity.
The ECB could even cut the emergency liquidity scheme off altogether, if it reckons Greece simply poses too much risk to the rest of the eurosystem.The ECB could even cut the emergency liquidity scheme off altogether, if it reckons Greece simply poses too much risk to the rest of the eurosystem.
That would be the nuclear option, though, and take the central bank even further into political considerations. Does it really want to be responsible for the break-up of the single currency?That would be the nuclear option, though, and take the central bank even further into political considerations. Does it really want to be responsible for the break-up of the single currency?
The decision is expected this afternoon.The decision is expected this afternoon.
ECB ensnared in politics as it faces vote on Bank of Greece loans: http://t.co/PH8k3ORqmS #FTECB ensnared in politics as it faces vote on Bank of Greece loans: http://t.co/PH8k3ORqmS #FT
Also coming up today...Also coming up today...
Some of the world’s biggest banks are expected to be fined billions of dollars, and face criminal charges, over the foreign-exchange rate rigging scandal.Some of the world’s biggest banks are expected to be fined billions of dollars, and face criminal charges, over the foreign-exchange rate rigging scandal.
In the City, investors will be digesting results from high street stalwart Marks & Spencer, fashion chain Burberry and travel firm Thomas Cook.In the City, investors will be digesting results from high street stalwart Marks & Spencer, fashion chain Burberry and travel firm Thomas Cook.
And we get minutes of the last meeting of the Bank of England at 9.30am BST, and then the Federal Reserve tonight (7pm BST).And we get minutes of the last meeting of the Bank of England at 9.30am BST, and then the Federal Reserve tonight (7pm BST).