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Greek crisis: ECB to decide on emergency support as France calls for deal - live updates Greek crisis: ECB to decide on emergency support as France calls for deal - live updates
(35 minutes later)
1.28pm BST13:28
Varoufakis: Ending emergency help would be failure of democracy and monetary union
BBC Radio 4 have just broadcast their interview with the Greek finance minister (live here).
Is it inevitable that restrictions will be imposed on how much money people can withdraw from banks?
This is a matter that we will have to work overnight on, with the appropriate authorities in Greece and Frankfurt, says Varoufakis.
So will there be capital controls?
Varoufakis:.
I, as minister of finance, with the Bank of Greece and European Central Bank, will work out what to be done to minimise the burden on our people from Europe’s refusal to grant us basic democratic right.
So he’s not announcing capital controls are certainly coming (as had been rumoured earlier).
Varoufakis also argues that it would be a fundamental breach of European democracy if the ECB decides that Greece’s banks shouldn’t be allowed to keep functioning while its Greek people have their say.
He’s tweeted this point too:
Capital controls within a monetary union are a contradiction in terms. The Greek government opposes the very concept.
But what about the prospect of the ECB pulling emergency funding today?
As a politician, and a European citizen, I find it appalling that we are having such discussions within a monetary union, Varoufakis replies.
If it happens, it would mean that:
That Europe has failed in its duty to preserve in parallel a democratic process and a monetary union.
In a monetary union, a central bank should do “whatever it takes”, and in a democracy the people should be able to vote on momentous issues without seeing their banks.
More to follow...
1.00pm BST13:00
My colleague Jon Henley reports from Athens:
A lot of these around this morning ... #Greece pic.twitter.com/VEdht2bhaN
12.49pm BST12:4912.49pm BST12:49
Things are starting to move fast.Things are starting to move fast.
Reuters is reporting that Greece’s Financial Stability Council is due to meet this afternoon to discuss the banking situation.Reuters is reporting that Greece’s Financial Stability Council is due to meet this afternoon to discuss the banking situation.
That council includes of Yanis Varoufakis, his deputy Dimitris Mardas, Central Bank Governor Yiannis Stournaras, and also the head of the Greek Banks Association, the chairman of the HFSF bank bailout fund and the head of the Capital Markets Commission.That council includes of Yanis Varoufakis, his deputy Dimitris Mardas, Central Bank Governor Yiannis Stournaras, and also the head of the Greek Banks Association, the chairman of the HFSF bank bailout fund and the head of the Capital Markets Commission.
Capital controls in the making? Greek financial stability council to convene at 4pm local time to discuss banking situation.Capital controls in the making? Greek financial stability council to convene at 4pm local time to discuss banking situation.
12.42pm BST12:4212.42pm BST12:42
Greek pensions and wages looming tooGreek pensions and wages looming too
John HooperJohn Hooper
Even before Tuesday when Greece’s bailout programme expires, another deadline is coming towards Alexis Tsipras’s government like an express train.Even before Tuesday when Greece’s bailout programme expires, another deadline is coming towards Alexis Tsipras’s government like an express train.
The end of the month is fast approaching, and with it the payment of wages and pensions which should begin on Monday.The end of the month is fast approaching, and with it the payment of wages and pensions which should begin on Monday.
That – and not the bailout expiry – could trigger the closure of the banks and the shutting down of their cash machines, the daily Ta Nea reported today. It said the government was hoping the central bank would transfer €1.5bn to keep people from leaving bank counters and ATMs empty-handed.That – and not the bailout expiry – could trigger the closure of the banks and the shutting down of their cash machines, the daily Ta Nea reported today. It said the government was hoping the central bank would transfer €1.5bn to keep people from leaving bank counters and ATMs empty-handed.
But what no one knows is whether – with or without the support of the ECB -- the Bank of Greece has the money to transfer. If not, then the banks may well be shut tomorrow as they prepare for restrictions on depositor withdrawals.But what no one knows is whether – with or without the support of the ECB -- the Bank of Greece has the money to transfer. If not, then the banks may well be shut tomorrow as they prepare for restrictions on depositor withdrawals.
Even if the central bank can scrape together the funds for Monday’s heavy withdrawals, without ECB support, the retail banks look certain to run out of cash once that wages and pensions have been paid. At that point, restrictions would become inevitable.Even if the central bank can scrape together the funds for Monday’s heavy withdrawals, without ECB support, the retail banks look certain to run out of cash once that wages and pensions have been paid. At that point, restrictions would become inevitable.
Ta Nea said that adjusting the country’s ATMs would take two to three days, during which the banks would need to remain closed.Ta Nea said that adjusting the country’s ATMs would take two to three days, during which the banks would need to remain closed.
Updated at 12.50pm BSTUpdated at 12.50pm BST
12.37pm BST12:3712.37pm BST12:37
Heads-up: BBC Radio 4 is going to broadcast an interview with Greece’s finance minister, Yanis Varoufakis, sometime after 1pm BST (3pm Athens).Heads-up: BBC Radio 4 is going to broadcast an interview with Greece’s finance minister, Yanis Varoufakis, sometime after 1pm BST (3pm Athens).
In it, Greece’s finance minister talks about the ECB’s imminent decision on bank support, and the issue of capital controls.In it, Greece’s finance minister talks about the ECB’s imminent decision on bank support, and the issue of capital controls.
It should be broadcast live here.It should be broadcast live here.
#tw2 Greek finance minister @yanisvaroufakis talks about capital controls, bank, and future of euro#tw2 Greek finance minister @yanisvaroufakis talks about capital controls, bank, and future of euro
Greek finance min @yanisvaroufakis tells #tw2 ECB considering cutting funds to banks is appalling - if they do Europe will have failed.Greek finance min @yanisvaroufakis tells #tw2 ECB considering cutting funds to banks is appalling - if they do Europe will have failed.
I believe it’ll be uploaded here once it’s been broadcast.I believe it’ll be uploaded here once it’s been broadcast.
12.31pm BST12:3112.31pm BST12:31
Associated Press reports that some Greek cash machines have been busy again this morning, as we await the verdict of the ECB.Associated Press reports that some Greek cash machines have been busy again this morning, as we await the verdict of the ECB.
Worried Greeks continued lining up at ATM machines Sunday morning, the day after the Prime Minister Alexis Tsipras called for a referendum on creditors’ financial proposals in return for rescue loans.Worried Greeks continued lining up at ATM machines Sunday morning, the day after the Prime Minister Alexis Tsipras called for a referendum on creditors’ financial proposals in return for rescue loans.
While some machines were running out of cash, others were being replenished.While some machines were running out of cash, others were being replenished.
12.26pm BST12:2612.26pm BST12:26
A couple of photos from Athens today:A couple of photos from Athens today:
12.22pm BST12:2212.22pm BST12:22
From Athens, John Hooper writes:From Athens, John Hooper writes:
The European Central Bank was facing one of the most momentous decisions of its brief history on Sunday as its board members considered whether to keep providing more of the emergency lending that has kept Greek banks open despite a steady run on deposits that accelerated dramatically at the weekend.The European Central Bank was facing one of the most momentous decisions of its brief history on Sunday as its board members considered whether to keep providing more of the emergency lending that has kept Greek banks open despite a steady run on deposits that accelerated dramatically at the weekend.
An ECB spokesman declined to comment on reports that the board had already made up its mind to scrap the programme, known as Emergency Liquidity Assistance (ELA). But a source hinted that talks were already in progress on Sunday morning.An ECB spokesman declined to comment on reports that the board had already made up its mind to scrap the programme, known as Emergency Liquidity Assistance (ELA). But a source hinted that talks were already in progress on Sunday morning.
Here’s his full take:Here’s his full take:
Related: Greek crisis: ECB to decide on emergency fundingRelated: Greek crisis: ECB to decide on emergency funding
12.20pm BST12:2012.20pm BST12:20
ECB discussing Greek bank crisisECB discussing Greek bank crisis
The European Central Bank has begun holding a conference call on whether to continue providing emergency liquidity to the Greek bank sector.The European Central Bank has begun holding a conference call on whether to continue providing emergency liquidity to the Greek bank sector.
There are various rumour swirling around, so let’s be cautious.There are various rumour swirling around, so let’s be cautious.
Reuters is reporting that the ECB is considering keeping ELA running, but demanding a higher ‘haircut’ on the assets that Greek banks hand over in return (reflecting the fact that those assets are now riskier).Reuters is reporting that the ECB is considering keeping ELA running, but demanding a higher ‘haircut’ on the assets that Greek banks hand over in return (reflecting the fact that those assets are now riskier).
The bigger the haircut, the less liquidity is still available to Greek banks to keep running.The bigger the haircut, the less liquidity is still available to Greek banks to keep running.
It says:It says:
“There is a possibility of an extension,” said one of the people with direct knowledge of the ongoing telephone discussion among the ECB’s decision-making Governing Council, adding that a bigger ‘haircut’ is being discussed.“There is a possibility of an extension,” said one of the people with direct knowledge of the ongoing telephone discussion among the ECB’s decision-making Governing Council, adding that a bigger ‘haircut’ is being discussed.
This chart shows how Greek bank deposits have fallen steadily this year, to an 11-year low.This chart shows how Greek bank deposits have fallen steadily this year, to an 11-year low.
All eyes on Greek banks. This is how they were pushed to edge over last few months #Greece https://t.co/wliDSlinrR pic.twitter.com/oEwKQnKCf8All eyes on Greek banks. This is how they were pushed to edge over last few months #Greece https://t.co/wliDSlinrR pic.twitter.com/oEwKQnKCf8
And this chart shows how a higher haircut woulc cuts the amount of extra ELA funding available:And this chart shows how a higher haircut woulc cuts the amount of extra ELA funding available:
Reposting this (via Barclays) - ECB could maintain current Greek ELA this week, but increase haircuts on collateral. pic.twitter.com/ZtqxitOhnVReposting this (via Barclays) - ECB could maintain current Greek ELA this week, but increase haircuts on collateral. pic.twitter.com/ZtqxitOhnV
In short, it’s the ostIn short, it’s the ost
12.06pm BST12:0612.06pm BST12:06
Greece’s president has been meeting with senior political leaders today to discuss the situation, following last night’s referendum vote.Greece’s president has been meeting with senior political leaders today to discuss the situation, following last night’s referendum vote.
Prokopis Pavlopoulos has just seen Antonis Samaras, head of the right-wing opposition New Democracy party.Prokopis Pavlopoulos has just seen Antonis Samaras, head of the right-wing opposition New Democracy party.
He’s now expected to see Stavros Theodorakis, head of the centrist To Potami party.He’s now expected to see Stavros Theodorakis, head of the centrist To Potami party.
Both parties opposed the decision to hold a referendum, but were outvoted.Both parties opposed the decision to hold a referendum, but were outvoted.
samaras at start of meeting w/president pavlopoulos says his 'red line' is defending greece's position at the heart of europe. #greferendumsamaras at start of meeting w/president pavlopoulos says his 'red line' is defending greece's position at the heart of europe. #greferendum
pavlopoulos-samaras meeting over; no statements made. president now scheduled to meet with potami's theodorakis. #greferndumpavlopoulos-samaras meeting over; no statements made. president now scheduled to meet with potami's theodorakis. #greferndum
11.51am BST11:5111.51am BST11:51
Looks like there’s been a translation glitch out of Austria, so have updated that earlier post:Looks like there’s been a translation glitch out of Austria, so have updated that earlier post:
Apologies for confusion:Apologies for confusion:
11.36am BST11:3611.36am BST11:36
Here’s the official line from Britain’s government on the crisis this morning:Here’s the official line from Britain’s government on the crisis this morning:
A spokesperson for HM Treasury says:A spokesperson for HM Treasury says:
We urge the people of Greece to resolve the current uncertainty, and ensure economic and financial stability across Europe.We urge the people of Greece to resolve the current uncertainty, and ensure economic and financial stability across Europe.
“We have taken measures to increase our economic security so we can deal with risks like this from abroad, and we continue to take steps to prepare and protect ourselves from all eventualities”.“We have taken measures to increase our economic security so we can deal with risks like this from abroad, and we continue to take steps to prepare and protect ourselves from all eventualities”.
11.25am BST11:2511.25am BST11:25
One senior executive at one of Greece’s largest conglomerates says her firm has taken steps to cope with the possibility of capital controls being imposed.One senior executive at one of Greece’s largest conglomerates says her firm has taken steps to cope with the possibility of capital controls being imposed.
She told John Hooper, our Southern Europe editor, that:She told John Hooper, our Southern Europe editor, that:
“We are ready for everything....“We are ready for everything....
“We have foreign banks ready to support us and enough cash to deal with payments inside and outside Greece We have ensured that, for a long period ahead, we have everything we need.”“We have foreign banks ready to support us and enough cash to deal with payments inside and outside Greece We have ensured that, for a long period ahead, we have everything we need.”
But smaller firms, she added, will be much more dependent on the Greek banks.But smaller firms, she added, will be much more dependent on the Greek banks.
Here’s John’s take:Here’s John’s take:
Related: Greek referendum call prolongs political uncertainty and raises capital fearsRelated: Greek referendum call prolongs political uncertainty and raises capital fears
Updated at 11.25am BSTUpdated at 11.25am BST
11.08am BST11:0811.08am BST11:08
Austria: Greece would have to ask to leaveAustria: Greece would have to ask to leave
Austria’s finance minister, Hans Jörg Schelling, has flagged up that Greece would have to leave the European Union in order to leave the eurozone.Austria’s finance minister, Hans Jörg Schelling, has flagged up that Greece would have to leave the European Union in order to leave the eurozone.
He told the Die Presse newspaper that:He told the Die Presse newspaper that:
“Greece would have to file a request to do so. The other EU countries would have to approve the request. Only then could Greece leave the eurozone.”“Greece would have to file a request to do so. The other EU countries would have to approve the request. Only then could Greece leave the eurozone.”
There simply isn’t a clear way for a country to simply exit the single currency.There simply isn’t a clear way for a country to simply exit the single currency.
Martin Schulz, president of the European Parliament, told my colleague Ian Traynor recently that any country leaving the euro must also leave the EU.Martin Schulz, president of the European Parliament, told my colleague Ian Traynor recently that any country leaving the euro must also leave the EU.
Updated at 11.56am BSTUpdated at 11.56am BST
11.00am BST11:0011.00am BST11:00
The Foreign Office hasn’t changed its advice on managing your finances when travelling to Greece.The Foreign Office hasn’t changed its advice on managing your finances when travelling to Greece.
A spokeswoman tells us that the advice was “always under review” and the FCO website would be updated if necessary.A spokeswoman tells us that the advice was “always under review” and the FCO website would be updated if necessary.
At present, the current advice says:At present, the current advice says:
“When travelling outside of the UK, you should take more than one means of payment with you (cash, debit card, credit card). Make sure you have enough money to cover emergencies and any unexpected delays.”“When travelling outside of the UK, you should take more than one means of payment with you (cash, debit card, credit card). Make sure you have enough money to cover emergencies and any unexpected delays.”
10.44am BST10:4410.44am BST10:44
William Hill stops taking Grexit betsWilliam Hill stops taking Grexit bets
William Hill, the UK bookmaker, has refused to accept any more bets on Greece leaving the eurozone, after a flood of wagers on an early Grexit.William Hill, the UK bookmaker, has refused to accept any more bets on Greece leaving the eurozone, after a flood of wagers on an early Grexit.
Hill’s spokesman Graham Sharpe says:Hill’s spokesman Graham Sharpe says:
‘The only option people want to back at the moment is that Grexit will happen this year and we can no longer hope to balance the market so we have decided to pull the plug’‘The only option people want to back at the moment is that Grexit will happen this year and we can no longer hope to balance the market so we have decided to pull the plug’
Greece is also the 1/3 favourite to be the first country to leave the European Union, followed by the UK at 4/1, and Hungary at 12/1.Greece is also the 1/3 favourite to be the first country to leave the European Union, followed by the UK at 4/1, and Hungary at 12/1.
10.38am BST10:3810.38am BST10:38
French PM Manuel Valls also urged Greece to return to the negotiation table and reach a deal:French PM Manuel Valls also urged Greece to return to the negotiation table and reach a deal:
“I cannot resign myself to Greece leaving the euro zone ... We must find a solution.”“I cannot resign myself to Greece leaving the euro zone ... We must find a solution.”
10.37am BST10:3710.37am BST10:37
French PM: ECB should keep supporting Greek banksFrench PM: ECB should keep supporting Greek banks
France’s prime minister, Manuel Valls, has dropped a clear hint that the European Central Bank should keep supporting Greece’s banks:France’s prime minister, Manuel Valls, has dropped a clear hint that the European Central Bank should keep supporting Greece’s banks:
Speaking on Europe 1 radio, Valls said:Speaking on Europe 1 radio, Valls said:
“The European Central Bank is independent, but I don’t doubt it will assume its responsibilities.“The European Central Bank is independent, but I don’t doubt it will assume its responsibilities.
I don’t think it can cut off support, to put it another way.”I don’t think it can cut off support, to put it another way.”
Technically, it takes a two-thirds majority at the ECB to reject a request for more emergency funding from a national central bank.Technically, it takes a two-thirds majority at the ECB to reject a request for more emergency funding from a national central bank.
ECB Governing Council consists of EZ's 19 national central-bank chiefs, incl Greece plus 6 on Executive Board. 2/3rd majority to rein in ELAECB Governing Council consists of EZ's 19 national central-bank chiefs, incl Greece plus 6 on Executive Board. 2/3rd majority to rein in ELA
Valls also warned Greek voters that a “no” vote in the upcoming referendum would effectively be a decision to leave the euro zone.Valls also warned Greek voters that a “no” vote in the upcoming referendum would effectively be a decision to leave the euro zone.
“The Greek people must be able to decide lucidly. If there’s a negative vote, there is a real risk ...of exiting the euro zone.”“The Greek people must be able to decide lucidly. If there’s a negative vote, there is a real risk ...of exiting the euro zone.”
10.27am BST10:2710.27am BST10:27
The BBC is reporting this morning that the European Central Bank will vote to ‘turn off’ Emergency Liquidity Assistance (ELA) for Greek banks at its meeting later today, but many experts are doubtful.The BBC is reporting this morning that the European Central Bank will vote to ‘turn off’ Emergency Liquidity Assistance (ELA) for Greek banks at its meeting later today, but many experts are doubtful.
Economics editor Robert Peston had blogged that the ECB will conclude that it can’t continue extending credit to Greek banks, given the high risk of the Greek government defaulting.Economics editor Robert Peston had blogged that the ECB will conclude that it can’t continue extending credit to Greek banks, given the high risk of the Greek government defaulting.
One ‘well-placed source’ told Peston:One ‘well-placed source’ told Peston:
“We think the Greek government will have no choice but to announce a bank holiday on Monday, pending the introduction of capital controls.”“We think the Greek government will have no choice but to announce a bank holiday on Monday, pending the introduction of capital controls.”
ECB to turn off emergency help for Greek banksECB to turn off emergency help for Greek banks
We’ll find out later today. However, there’s a huge problem with the ECB pulling the plug -- Greece is technically still in a bailout programme for another three days. Crashing the banking sector now would be a deeply political decision, with the referendum coming up.We’ll find out later today. However, there’s a huge problem with the ECB pulling the plug -- Greece is technically still in a bailout programme for another three days. Crashing the banking sector now would be a deeply political decision, with the referendum coming up.
It’s more likely that the ECB would vote to cap the existing ELA, at its current level of €89bn. That would still leave Greek banks exposed if funds continued to be withdrawn.It’s more likely that the ECB would vote to cap the existing ELA, at its current level of €89bn. That would still leave Greek banks exposed if funds continued to be withdrawn.
Greece is still in a programme, until Tuesday. If ECB shuts the door on ELA before then it is intervening in a political processGreece is still in a programme, until Tuesday. If ECB shuts the door on ELA before then it is intervening in a political process
The idea that the ECB is about to "switch off" Emergency Liquidity Assistance to #Greece, as per reports today, is bonkers (1/2)The idea that the ECB is about to "switch off" Emergency Liquidity Assistance to #Greece, as per reports today, is bonkers (1/2)
Yes the ECB will possibly freeze ELA or tighten haircuts. Greek banks may not open on Mon. But after yday that was already the assumptionYes the ECB will possibly freeze ELA or tighten haircuts. Greek banks may not open on Mon. But after yday that was already the assumption
10.18am BST10:1810.18am BST10:18
Introduction: Greece on the brinkIntroduction: Greece on the brink
Good morning, and welcome to our rolling coverage of the Greek debt crisis.Good morning, and welcome to our rolling coverage of the Greek debt crisis.
The eurozone is entering the most perilous period since the creation of the single currency 16 years ago, after yesterday’s dramatic scenes in Brussels and Athens.The eurozone is entering the most perilous period since the creation of the single currency 16 years ago, after yesterday’s dramatic scenes in Brussels and Athens.
And today could be just as gripping,And today could be just as gripping,
Greece is on the brink of default this morning, after eurozone finance ministers yesterday refused to extend its bailout to allow a referendum to be held.Greece is on the brink of default this morning, after eurozone finance ministers yesterday refused to extend its bailout to allow a referendum to be held.
And in the early hours of this morning, Greek MPs voted to press on and hold the poll anyway, a week today:And in the early hours of this morning, Greek MPs voted to press on and hold the poll anyway, a week today:
Related: Greek crisis: Parliament approves referendum, after bailout extension rejected - as it happenedRelated: Greek crisis: Parliament approves referendum, after bailout extension rejected - as it happened
The path to that vote looks perilous though. Without the extension, Greece will exit its bailout at the end of Tuesday night, and presumably unable to repay the €1.6bn it owes the IMF on the same day.The path to that vote looks perilous though. Without the extension, Greece will exit its bailout at the end of Tuesday night, and presumably unable to repay the €1.6bn it owes the IMF on the same day.
The other eurozone finance ministers have already been drawing up measures to protect themselves, as our Europe editor Ian Traynor wrote last night:The other eurozone finance ministers have already been drawing up measures to protect themselves, as our Europe editor Ian Traynor wrote last night:
Europe’s single currency entered the stage of rupture for the first time in its 16-year life on Saturday night when 18 governments told Greece its bailout package would be terminated within days. The country plunged towards financial collapse after its leftwing prime minister, Alexis Tsipras, abandoned negotiations and called a referendum on his lenders’ terms for continuing the lifeline.Europe’s single currency entered the stage of rupture for the first time in its 16-year life on Saturday night when 18 governments told Greece its bailout package would be terminated within days. The country plunged towards financial collapse after its leftwing prime minister, Alexis Tsipras, abandoned negotiations and called a referendum on his lenders’ terms for continuing the lifeline.
An emergency meeting of eurozone finance ministers took place in Brussels on Saturday evening without Greece for the first time since the crisis began in 2010. It turned into a crisis planning session devoted to quarantining Greece and insulating the rest of the eurozone from the impact of anticipated financial mayhem...An emergency meeting of eurozone finance ministers took place in Brussels on Saturday evening without Greece for the first time since the crisis began in 2010. It turned into a crisis planning session devoted to quarantining Greece and insulating the rest of the eurozone from the impact of anticipated financial mayhem...
EU ministers refuse bailout extension for Greece as referendum loomsEU ministers refuse bailout extension for Greece as referendum looms
Attention now turns to the European Central Bank, which must now decide today whether to continue providing the emergency liquidity needed by the Greek banking sector to keep running.Attention now turns to the European Central Bank, which must now decide today whether to continue providing the emergency liquidity needed by the Greek banking sector to keep running.
We’ll be tracking all the main events through the day...We’ll be tracking all the main events through the day...