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48 hours to keep Greece in euro 48 hours to keep Greece in euro
(35 minutes later)
So what is the Greek government's plan to save its banks and stay in the euro?So what is the Greek government's plan to save its banks and stay in the euro?
These are the elements, according to Georgios Stathakis, the Economy Minister, in an exclusive BBC interview. These are the elements, according to Giorgos Stathakis, the Economy Minister, in an exclusive BBC interview.
First and foremost, the European Central Bank must keep Greek banks alive for a week to 10 days, so that rescue talks can progress between Athens and its creditors, eurozone governments and the International Monetary Fund.First and foremost, the European Central Bank must keep Greek banks alive for a week to 10 days, so that rescue talks can progress between Athens and its creditors, eurozone governments and the International Monetary Fund.
In a best case, he said, the ECB would provide an additional €3bn of Emergency Liquidity Assistance (ELA) later today.In a best case, he said, the ECB would provide an additional €3bn of Emergency Liquidity Assistance (ELA) later today.
But even if the ECB simply continues to freeze ELA, Mr Stathakis said the current cash withdrawal and transfer restrictions on banks could stay in place till Friday, without any of them collapsing.But even if the ECB simply continues to freeze ELA, Mr Stathakis said the current cash withdrawal and transfer restrictions on banks could stay in place till Friday, without any of them collapsing.
Naturally if the ECB decides to reduce ELA, which its mandate would allow it to do, then banks would be in dire straits.Naturally if the ECB decides to reduce ELA, which its mandate would allow it to do, then banks would be in dire straits.
The second element of a rescue would be Mr Tsipras's letter to creditors last week, when he accepted most of their proposals for spending cuts, tax rises and structural economic reforms - with relativity modest changes to the nature of proposed pension cuts.The second element of a rescue would be Mr Tsipras's letter to creditors last week, when he accepted most of their proposals for spending cuts, tax rises and structural economic reforms - with relativity modest changes to the nature of proposed pension cuts.
Finally the government wants a 30% reduction in its debt burden, as per the IMF's debt sustainability analysis of last week, either through direct write-offs or through lengthening the repayment term.Finally the government wants a 30% reduction in its debt burden, as per the IMF's debt sustainability analysis of last week, either through direct write-offs or through lengthening the repayment term.
Goodness only knows whether the eurozone - led by Berlin - and the IMF will deal on this basis.Goodness only knows whether the eurozone - led by Berlin - and the IMF will deal on this basis.
But, as Mr Stathakis conceded, with Greek banks on the verge of collapse, there is no longer any scope to put off a decision on whether Greece is in or out of the euro for much more than 48 hours.But, as Mr Stathakis conceded, with Greek banks on the verge of collapse, there is no longer any scope to put off a decision on whether Greece is in or out of the euro for much more than 48 hours.
For what it's worth, he said that his government does not have a mandate to quit the eurozone.For what it's worth, he said that his government does not have a mandate to quit the eurozone.
But with the Greek economy seizing up for want of a functioning banking system, a mandate for euro exit may be a luxury too far.But with the Greek economy seizing up for want of a functioning banking system, a mandate for euro exit may be a luxury too far.