Sometime Mario Draghi has yet spoken in Rage. Whether it would be legitimate for the European Central Bank (ECB), to make their decisions solely on the basis of any possible doubts about the ability of a government, asked the central bank president with easy an annoyed tone to give the answer equal to himself: “That’s not for us . We follow our mandate. “
Especially this sentence held a militant Draghi that day against his critics. Both those who had the ECB charged with having cut off the Greek banks wrongly of fresh central bank money. As well as those that hold the central bank already for far too generous -. And who will see themselves confirmed by the decision of the Governing Council this Thursday
Because the supreme monetary policy committee of the Euro-Zone is open to the twisted two and a half weeks before money supply for the Greek banks. In its day, frozen for almost 89 billion euro emergency loans are initially increased again, rising by € 900 million.
In order for the Greek banks are only now than a week get along. It was in line with the request of the Greek central bank in full, Draghi said, though downscaled resulting from its calculations needed for a week – allegedly the Bank of Greece had demanded an increase of 1.5 billion euros
ECB assumes to be paid on time
Following the agreement with the euro countries and the International Monetary Fund (IMF) on the way watched a third utility, the ECB appears to back a reasonable basis for a more generous attitude, even if in the meantime increased risk discounts for Wertpiere from Greece, which are pledged for emergency loans to remain in force.
As a positive point Draghi pointed to the successful vote of the Greek Parliament on a first package of reform laws. He also referred to the agreement of the Euro Group on a temporary bridge financing. You should enable Greece, both to settle its outstanding debts to the IMF and a lying in the ECB bond, which expires on Monday. Had this payment burst, any assistance by the ECB would have been up for grabs. But the central bank is to Draghi’s words expect to be served on time.
The freezing of emergency loans had Greece forced to introduce capital controls and the banks of the country to close. Since then, customers can withdraw a maximum of another 60 euros a day at ATMs. An immediate end to this state presented Draghi not in prospect. The responsibility lies ultimately with the Greek government, he said. It should be all aware that the bank closure burdening the economy. On the other hand one should not risk having it come to a bank runs, as soon as the switch would reopen
Draghi’s message, therefore. It should be a normalization of the banking operations so strive soon as possible, “but also with caution”. Economists at DZ Bank assume that the Ela-increase of 900 million euros will not be enough to already pick up the capital controls again.
Draghi defends itself against Greek allegations
The emergency loans for Greece banks were last become a bone of contention in Europe. Greek politicians had accused the ECB to blackmail the country with the freezing of the loan in order to force an agreement on the terms of the creditors in the debt dispute. The central bank no longer fulfill their duty in order to ensure a functioning banking system. An accusation which confronted decision Draghi.
It is not the job of the ECB to finance all the banks, he said. Condition is that the financial institutions are solvent and could pledge sufficient collateral. Given its close links with the Greek government you have to react, as the talks on another rescue program for Athens were initially failed. “The ECB is a rule-based organization,” said Draghi’s mantra.
Orthodox money politicians and economists accuse the Fed before turn, these rules far too often bent and having stretched, especially in the case of Greece. Therefore we have created a false expectation. Especially in Germany, the criticism is therefore repeatedly expressed, the ECB should completely delete the Ela-aids much earlier.
But even that would not have to fitted Draghi’s interpretation of the ECB’s rules: “Those who say we have the Ela should set a long time ago, require us to violate our mandate,” growled Draghi – probably a dig at his permanent critic Jens Weidmann, the president of the Bundesbank, which had always been critical to the emergency loans.
ECB chief for debt relief
Very many friends in Germany is expected to Draghi that day anyway not have made. The ever so popular reputation of Finance Minister Wolfgang Schäuble (CDU) after a Grexit declined to comment directly to the Italians though. However, he repeatedly stressed that the ECB assume that Greece continues to remain a member of the monetary union. And he made one more time clearly what he thinks instead of splitting the right way in Europe. More rather than less integration
For this purpose, Draghi presented bluntly behind the demand to reduce Greece’s debt. “It is indisputable that debt relief is necessary,” he said. The question is merely how this was possible within the existing Treaty. This is not a direct contradiction to the attitude of the federal government, which had excluded only a formal debt restructuring, but not longer maturities or lower interest rates.
go down well should it this country yet not necessarily, agrees Marcel Fratzscher, President of the German Institute for Economic Research. He sees the ECB’s decision but as a logical continuation of its policy. The increase in emergency loans was “a strong sign of confidence in a third program,” said the former ECB economist. “The ECB includes a Grexit categorically and therefore rejects the claims of some from in Germany.”
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