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Greek crisis: ECB caps emergency funding lifeline - live updates Greek crisis: ECB caps emergency funding lifeline - live updates
(35 minutes later)
3.27pm BST15:27
EC releases last Greek draft proposal
The European Commission has just released the latest draft proposal which the two sides were working on until Friday night, when Greece shocked the eurozone by announcing a referendum.
It has also claimed that creditors would have considered Greece’s future financing needs, and debt sustainability, at Saturday’s eurogroup meeting.
Instead, of course, euro finance chiefs decided Greece’s bailout should end on Tuesday night and then planned for the future without Athens at the table.
EU Commission says eurogroup were preparing to agree comprehensive solution when Greeks walked away. http://t.co/oJBOL9iwhD
The EC says:
Discussions on this text were ongoing with the Greek authorities on Friday night in view of the Eurogroup of 27 June 2015. The understanding of all parties involved was that this Eurogroup meeting should achieve a comprehensive deal for Greece, one that would have included not just the measures to be jointly agreed, but would also have addressed future financing needs and the sustainability of the Greek debt. It also included support for a Commission-led package for a new start for jobs and growth in Greece, boosting recovery of and investment in the real economy, which was discussed and endorsed by the College of Commissioners on Wednesday 24 June 2015.
And here’s that draft proposal, which I guess is what the Greek people will be asked to vote on on Sunday -- expect it never became a formal offer.
In highly unusual move, EC publishes full 25 June proposal to Greece. This is what Greek people will vote on next Sun http://t.co/q5stiLcuez
3.16pm BST15:16
Marks & Spencer has about 25 stores in Greece. This weekend, it declined to make any comment on what it might do should Greece’s banks close.
Rival retailer Dixons Carphone, which owns the Kotsovolos chain in Greece, has already said it could benefit from tough times in the country which might force some of its competitors out of action.
In fact the company has already done rather well out of Greece’s troubles. Kotsovolos, which has just under 100 stores making it the country’s largest electrical goods retailer, returned to profit in the three months to 2 May as underlying sales rose by more than 8%. The chain benefited from a government scheme helping disadvantaged people with free tablets and laptops.
Seb James, chief executive, told The Independent this month that Dixons Carphone has got detailed contingency plans in place if Greece does exit the euro.
“Obviously we don’t want to see civil unrest because that’s not good for business, but we’ve been there before and are well prepared.
3.10pm BST15:103.10pm BST15:10
Economics professor: Capital controls are comingEconomics professor: Capital controls are coming
Professor Karl Whelan of University College Dublin just launched a blogpost which explains why he thinks some Greek banks won’t open tomorrow.Professor Karl Whelan of University College Dublin just launched a blogpost which explains why he thinks some Greek banks won’t open tomorrow.
The ECB’s decision to cap emergency liquidity at its current level means capital controls are now coming, he argues.The ECB’s decision to cap emergency liquidity at its current level means capital controls are now coming, he argues.
That’s because commercial bank reserves have probably been significantly depleted by the rush to some cash machines this weekend.That’s because commercial bank reserves have probably been significantly depleted by the rush to some cash machines this weekend.
So, they have little left in cash or reserves at the central bank, leaving them exposed when they open their doors on Monday morning.So, they have little left in cash or reserves at the central bank, leaving them exposed when they open their doors on Monday morning.
Professor Whelan explains:Professor Whelan explains:
In that case, the only way the Greek banks could finance the (presumably very large) demands for withdrawals on Monday would have been to get access to additional funds from the Bank of Greece in the form of additional ELA. That will not be possible now, so most likely the banks will not open on Monday.In that case, the only way the Greek banks could finance the (presumably very large) demands for withdrawals on Monday would have been to get access to additional funds from the Bank of Greece in the form of additional ELA. That will not be possible now, so most likely the banks will not open on Monday.
The statement that “ECB will work closely with Bank of Greece to maintain financial stability” is probably code for “ECB will help Greece to design a programme of capital controls”.The statement that “ECB will work closely with Bank of Greece to maintain financial stability” is probably code for “ECB will help Greece to design a programme of capital controls”.
So it has come to this. No matter how well things go from here (and positive scenarios are hard to imagine) restrictions on Greek banks could be in place for a very long time.So it has come to this. No matter how well things go from here (and positive scenarios are hard to imagine) restrictions on Greek banks could be in place for a very long time.
It is easy at this point to panic and say it’s the end of the world and a new currency must be days away. It’s worth remembering, however, the Cyprus coped surprisingly well with its capital controls and ultimately they were lifted this year and the banking system survived. There is probably still a small window of opportunity left to keep Greece in the euro, even if the banks don’t open tomorrow.It is easy at this point to panic and say it’s the end of the world and a new currency must be days away. It’s worth remembering, however, the Cyprus coped surprisingly well with its capital controls and ultimately they were lifted this year and the banking system survived. There is probably still a small window of opportunity left to keep Greece in the euro, even if the banks don’t open tomorrow.
A short post on the ECB decision. "ECB Decision Likely Means Greek Banks Stay Closed." https://t.co/InbEez9wtRA short post on the ECB decision. "ECB Decision Likely Means Greek Banks Stay Closed." https://t.co/InbEez9wtR
3.05pm BST15:053.05pm BST15:05
The Bank of Greece has denied that governor Yannis Stournaras has threatened to quit if capital controls aren’t implemented, as has apparently been rumoured.The Bank of Greece has denied that governor Yannis Stournaras has threatened to quit if capital controls aren’t implemented, as has apparently been rumoured.
A BoG official told Reuters that:A BoG official told Reuters that:
“We categorically deny that Governor Stournaras threatened to resign.”“We categorically deny that Governor Stournaras threatened to resign.”
3.03pm BST15:033.03pm BST15:03
The latest word is that Greece’s financial stability council will start meeting at 4pm BST, or 6pm local time, to discuss the situation.The latest word is that Greece’s financial stability council will start meeting at 4pm BST, or 6pm local time, to discuss the situation.
That meeting will be chaired by finance minister Varoufakis (who has already come out against capital controls this morning), and Bank of Greece governor Yannis Stournaras.That meeting will be chaired by finance minister Varoufakis (who has already come out against capital controls this morning), and Bank of Greece governor Yannis Stournaras.
#Greece Systemic Stability Council headed by FinMin #Varoufakis convenes at 6pm (GR), according to local media. #ecb #ela #banking #banks#Greece Systemic Stability Council headed by FinMin #Varoufakis convenes at 6pm (GR), according to local media. #ecb #ela #banking #banks
2.55pm BST14:552.55pm BST14:55
Dow Jones Newswires reporter Stelios Bouras is taking the mood at the cash machines too:Dow Jones Newswires reporter Stelios Bouras is taking the mood at the cash machines too:
Some look really worried while lining up at ATM to take money, others take selfies #greece #greferendumSome look really worried while lining up at ATM to take money, others take selfies #greece #greferendum
2.49pm BST14:492.49pm BST14:49
And here are photos of those lengthening ATM queues in Kifisia.And here are photos of those lengthening ATM queues in Kifisia.
2.45pm BST14:452.45pm BST14:45
Across the Greek capital, our Southern Europe John Hooper spies longer queues at the cash machines:Across the Greek capital, our Southern Europe John Hooper spies longer queues at the cash machines:
Alarm is growing, even in affluent parts of Athens that were unaffected on Saturday. I am in well-heeled Kifisia, a northern suburb, and I just counted 78 people queuing at four ATMs.Alarm is growing, even in affluent parts of Athens that were unaffected on Saturday. I am in well-heeled Kifisia, a northern suburb, and I just counted 78 people queuing at four ATMs.
2.43pm BST14:432.43pm BST14:43
Fear and confusion in AthensFear and confusion in Athens
Jon HenleyJon Henley
There is a more than slightly surreal atmosphere in central Athens today, reports my colleague Jon Henley.There is a more than slightly surreal atmosphere in central Athens today, reports my colleague Jon Henley.
Sun shining, cafe and restaurant terraces full, whole families out for Sunday lunch – and elsewhere, in teleconferences and committee rooms, the nation’s fate (or at least, its near-term economic and financial future) is being decided.Sun shining, cafe and restaurant terraces full, whole families out for Sunday lunch – and elsewhere, in teleconferences and committee rooms, the nation’s fate (or at least, its near-term economic and financial future) is being decided.
Most Greeks I spoke to are confused. “I have a lot of questions,” said Yannis Georgousopoulos, an MBA student.Most Greeks I spoke to are confused. “I have a lot of questions,” said Yannis Georgousopoulos, an MBA student.
“Do the banks open tomorrow? What actually happens when the bailout ends, Tuesday? If the referendum’s a yes, does the government go? If it’s a No, will the institutions change their mind? It’s just a real mess. Crazy.”“Do the banks open tomorrow? What actually happens when the bailout ends, Tuesday? If the referendum’s a yes, does the government go? If it’s a No, will the institutions change their mind? It’s just a real mess. Crazy.”
Marina, who works for a women’s magazine, and her friend Jenny were anxious about getting at their money – they had finally found a functioning ATM – but more worried about what the coming week would do to Greece.Marina, who works for a women’s magazine, and her friend Jenny were anxious about getting at their money – they had finally found a functioning ATM – but more worried about what the coming week would do to Greece.
“We’ll tear ourselves apart,” said Marina.“We’ll tear ourselves apart,” said Marina.
“In fact it’s already started happening. No one really knows what’s going on, no one is really informed, but everyone’s got opinions – strong opinions … That scares me.”“In fact it’s already started happening. No one really knows what’s going on, no one is really informed, but everyone’s got opinions – strong opinions … That scares me.”
Neither had a clue what to expect (“Way too many questions – nobody knows,” said Marina), neither wanted Greece to exit the euro (“Nobody wants a Grexit,” said Jenny) and both disagreed over how their government had handled the situation. “Tsipras has fought, he really fought,” said Jenny. “I hope he keeps fighting. We should get a better deal than this.”Neither had a clue what to expect (“Way too many questions – nobody knows,” said Marina), neither wanted Greece to exit the euro (“Nobody wants a Grexit,” said Jenny) and both disagreed over how their government had handled the situation. “Tsipras has fought, he really fought,” said Jenny. “I hope he keeps fighting. We should get a better deal than this.”
Marina, though, was not so sure the prime minister would be able to – or even should.“I don’t believe he’ll get a better deal, actually, whatever happens,” she said.Marina, though, was not so sure the prime minister would be able to – or even should.“I don’t believe he’ll get a better deal, actually, whatever happens,” she said.
“He’s pissed them off now, especially with the referendum. Maybe he should have taken what they offered.”“He’s pissed them off now, especially with the referendum. Maybe he should have taken what they offered.”
2.36pm BST14:362.36pm BST14:36
More reaction:More reaction:
ELA freeze hurts Syriza as cap controls & reminds Greeks of scary prospects if a No. But ECB giving vote a breathing space, betting on YesELA freeze hurts Syriza as cap controls & reminds Greeks of scary prospects if a No. But ECB giving vote a breathing space, betting on Yes
2.31pm BST14:312.31pm BST14:31
We shouldn’t underestimate the importance of this quote, from Greece’s central bank governor:We shouldn’t underestimate the importance of this quote, from Greece’s central bank governor:
“The Bank of Greece, as a member of the Eurosystem, will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”“The Bank of Greece, as a member of the Eurosystem, will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”
All measures could potentially mean restrictions on bank withdrawals to get Greece through until next Sunday, and the referendum.All measures could potentially mean restrictions on bank withdrawals to get Greece through until next Sunday, and the referendum.
Key part of @ecb statement: @YStournaras to seek cap controls. ELA ceiling + cap controls = #Greece banks survive wk pic.twitter.com/jx1uP8W0etKey part of @ecb statement: @YStournaras to seek cap controls. ELA ceiling + cap controls = #Greece banks survive wk pic.twitter.com/jx1uP8W0et
2.26pm BST14:262.26pm BST14:26
ECB decision: What the experts sayECB decision: What the experts say
Karl Whelan, professor of economics at University College Dublin, fears that Greek banks will struggle to open tomorrow:Karl Whelan, professor of economics at University College Dublin, fears that Greek banks will struggle to open tomorrow:
The ECB decision to cap ELA is more dramatic than people seem to think. Without an ELA extension seems unlikely Greek banks can stay open.The ECB decision to cap ELA is more dramatic than people seem to think. Without an ELA extension seems unlikely Greek banks can stay open.
Other economists agree that the decision to cap emergency liquidity puts Greece’s financial system under even more strain:Other economists agree that the decision to cap emergency liquidity puts Greece’s financial system under even more strain:
European Central Bank has *not* raised the amount it will lend to Greece. This signif raises the pressure on Greek banks which need cash.European Central Bank has *not* raised the amount it will lend to Greece. This signif raises the pressure on Greek banks which need cash.
Make no mistake, that's an ELA cap/freeze, and more restrictions could follow. http://t.co/T39uw7XDvJMake no mistake, that's an ELA cap/freeze, and more restrictions could follow. http://t.co/T39uw7XDvJ
2.19pm BST14:192.19pm BST14:19
Instant verdict: Still huge pressure on GreeceInstant verdict: Still huge pressure on Greece
The European Central Bank has not taken the nuclear option of crashing the Greek banking sector today (although, as covered this morning, it wasn’t really on the cards)The European Central Bank has not taken the nuclear option of crashing the Greek banking sector today (although, as covered this morning, it wasn’t really on the cards)
But by not providing any more emergency liquidity assistance, the ECB is putting huge pressure on the Greek banking sector, as top officials wonder how they will cope if many Greeks try to withdraw savings on Monday.But by not providing any more emergency liquidity assistance, the ECB is putting huge pressure on the Greek banking sector, as top officials wonder how they will cope if many Greeks try to withdraw savings on Monday.
ELA has been a lifeline that has been steadily raised this year, to make up for the outflow from banks.ELA has been a lifeline that has been steadily raised this year, to make up for the outflow from banks.
So by effectively capping it at €89bn, the ECB has ensured that Greece’s emergency pot will run dry soon.So by effectively capping it at €89bn, the ECB has ensured that Greece’s emergency pot will run dry soon.
That means Greek officials must now consider what measure they need to take to get the system through the week, until Sunday’s referendum.That means Greek officials must now consider what measure they need to take to get the system through the week, until Sunday’s referendum.
And as flagged up earlier, Greece’s Financial Stability Council (including Varoufakis and Stournaras) is meeting this afternoon.And as flagged up earlier, Greece’s Financial Stability Council (including Varoufakis and Stournaras) is meeting this afternoon.
It’s a classic move from the ECB, avoiding the political decision that Greece is definitely going to do bankrupt.It’s a classic move from the ECB, avoiding the political decision that Greece is definitely going to do bankrupt.
1.42pm BST13:421.42pm BST13:42
ECB MAINTAINS EMERGENCY FUNDING BUT DOESN'T RAISE ITECB MAINTAINS EMERGENCY FUNDING BUT DOESN'T RAISE IT
It’s official, the European Central Bank has decided to maintain the emergency liquidity support on offer to Greece, but it has also not provided any extra help.It’s official, the European Central Bank has decided to maintain the emergency liquidity support on offer to Greece, but it has also not provided any extra help.
In a statement, the ECB says that it has decided to maintain the ELA ceiling at Friday’s limit (that’s €89bn).In a statement, the ECB says that it has decided to maintain the ELA ceiling at Friday’s limit (that’s €89bn).
So it hasn’t pulled the plug, but it also hasn’t provided extra funding to cover the funds that have flowed out of Greek banks this weekend.So it hasn’t pulled the plug, but it also hasn’t provided extra funding to cover the funds that have flowed out of Greek banks this weekend.
For weeks, the ECB has been agreeing to requests from Greece for extra emergency liquidity, often providing a billions euros or more each week.For weeks, the ECB has been agreeing to requests from Greece for extra emergency liquidity, often providing a billions euros or more each week.
So if there’s no extra ELA, that is going to make it harder for banks to handle withdrawals, if people keep taking money out.So if there’s no extra ELA, that is going to make it harder for banks to handle withdrawals, if people keep taking money out.
Here’s the full statement:Here’s the full statement:
The Governing Council of the European Central Bank today welcomed the commitment by ministers from euro area Member States to take all necessary measures to further improve the resilience of euro area economies and to stand ready to take decisive steps to strengthen Economic and Monetary Union.The Governing Council of the European Central Bank today welcomed the commitment by ministers from euro area Member States to take all necessary measures to further improve the resilience of euro area economies and to stand ready to take decisive steps to strengthen Economic and Monetary Union.
Following the decision by the Greek authorities to hold a referendum and the non-prolongation of the EU adjustment programme for Greece, the Governing Council declared it will work closely with the Bank of Greece to maintain financial stability.Following the decision by the Greek authorities to hold a referendum and the non-prolongation of the EU adjustment programme for Greece, the Governing Council declared it will work closely with the Bank of Greece to maintain financial stability.
Given the current circumstances, the Governing Council decided to maintain the ceiling to the provision of emergency liquidity assistance (ELA) to Greek banks at the level decided on Friday (26 June 2015).Given the current circumstances, the Governing Council decided to maintain the ceiling to the provision of emergency liquidity assistance (ELA) to Greek banks at the level decided on Friday (26 June 2015).
The Governing Council stands ready to reconsider its decision.The Governing Council stands ready to reconsider its decision.
Mario Draghi, ECB President, said:Mario Draghi, ECB President, said:
“We continue to work closely with the Bank of Greece and we strongly endorse the commitment of Member States in pledging to take action to address the fragilities of euro area economies.”“We continue to work closely with the Bank of Greece and we strongly endorse the commitment of Member States in pledging to take action to address the fragilities of euro area economies.”
Yannis Stournaras, Governor of the Bank of Greece, said:Yannis Stournaras, Governor of the Bank of Greece, said:
“The Bank of Greece, as a member of the Eurosystem, will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”“The Bank of Greece, as a member of the Eurosystem, will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”
The Governing Council is closely monitoring the situation in financial markets and the potential implications for the monetary policy stance and for the balance of risks to price stability in the euro area. The Governing Council is determined to use all the instruments available within its mandate.The Governing Council is closely monitoring the situation in financial markets and the potential implications for the monetary policy stance and for the balance of risks to price stability in the euro area. The Governing Council is determined to use all the instruments available within its mandate.
Updated at 1.43pm BSTUpdated at 1.43pm BST
1.33pm BST13:331.33pm BST13:33
Varoufakis also insisted that Greece needn’t be forced out of the eurozone. Indeed, there’s no mechanism to exit the single currency.Varoufakis also insisted that Greece needn’t be forced out of the eurozone. Indeed, there’s no mechanism to exit the single currency.
The euro was never designed to solve a problem such as Greek insolvency, and we’ve had a comedy of errors since, he adds.The euro was never designed to solve a problem such as Greek insolvency, and we’ve had a comedy of errors since, he adds.
So will you repay €1.6bn the IMF?So will you repay €1.6bn the IMF?
Varoufakis replies that Greece is due €1.9bn in profits which the ECB made on its holdings of Greek banks.Varoufakis replies that Greece is due €1.9bn in profits which the ECB made on its holdings of Greek banks.
We owe money to one part of the troika, and we are owed money by another.....We owe money to one part of the troika, and we are owed money by another.....
Those profits, though, are likely to vanish from the table if the bailout expires on 30 June (based on what the Eurogroup said yesterday).Those profits, though, are likely to vanish from the table if the bailout expires on 30 June (based on what the Eurogroup said yesterday).
Updated at 2.28pm BSTUpdated at 2.28pm BST
1.28pm BST13:281.28pm BST13:28
Varoufakis: Ending emergency help would be failure of democracy and monetary unionVaroufakis: 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).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?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.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?So will there be capital controls?
Varoufakis:.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.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).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.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:He’s tweeted this point too:
Capital controls within a monetary union are a contradiction in terms. The Greek government opposes the very concept.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?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.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: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.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.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...More to follow...
1.00pm BST13:001.00pm BST13:00
My colleague Jon Henley reports from Athens:My colleague Jon Henley reports from Athens:
A lot of these around this morning ... #Greece pic.twitter.com/VEdht2bhaNA 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...