How likely are capital controls in Greece?

Eurogroup Chairman Jeroen Dijsselbloem yesterday raised the prospect of potential capital controls in Greece. But how likely is such a scenario and what could bring it about? Open Europe’s Raoul Ruparel investigates.

Raoul Ruparel

Head of Economic Research

18 March 2015+

Eurogroup sends Greece a warning message

In an interview with Dutch BNR Nieuwsradio yesterday, Eurogroup Chairman Jeroen Dijsselbloem said:

"It’s been explored what should happen if a country gets into deep trouble. That doesn’t immediately have to be an exit scenario…[In Cyprus] we had to take radical measures, banks were closed for a while and capital flows within and out of the country were tied to all kinds of conditions but you can think all kinds of scenarios.”

ECB Grants Greece Less Emergency Liquidity Than Requested

by Jeff BlackKarl and Stagno Navarra

11:01 PM EET

March 18, 2015

(Bloomberg) -- The European Central Bank raised the maximum amount of emergency liquidity available to Greek lenders by 400 million euros ($435 million), less than the Greek central bank requested, people familiar with the decision said.

The increase was approved by the ECB’s Governing Council on Wednesday, the people said, asking not to be identified as the council meeting was private. Greece requested about 900 million euros, one of the people said.

Warnings Raised of a Greek Exit From the Euro

By LIZ ALDERMANMARCH 18, 2015

The New York Times

PARIS — Just a few weeks ago, fears that Greece might exit the euro union subsided when Europe extended its financial bailout. But as a new war of words escalates between Athens and its creditors, talk of a “Grexit” is heating up.

In the last several days, European and American banks, think tanks and ratings agencies have issued a fresh round of warnings and studies calculating the damage to the currency union if Greece were to default on its debts or stop using the euro.

Technical Talks on Greece’s Bailout Not Going Well, Officials Say

 The Wall Street Journal

The European Commission, ECB and IMF are getting very little information, European officials say

By GABRIELE STEINHAUSER and  VIKTORIA DENDRINOU

Updated March 18, 2015 12:22 p.m. ET

BRUSSELS—Technical talks between Greece and its creditors aren't going well, officials said Wednesday, with each blaming the other for the snags in crucial negotiations.

Teams from the European Commission, the European Central Bank and the International Monetary Fund are getting very little information on the government’s finances and other key topics in Athens, two European officials said.

“The line was that the Greeks aren't cooperating,” said one of the officials, summarizing the institutions’ account during a teleconference among senior eurozone finance ministry officials on Tuesday.

IMF Considers Greece Its Most Unhelpful Client Ever

by Karl Stagno NavarraBen Sills Marcus Bensasson

(Bloomberg) -- International Monetary Fund officials told their euro-area colleagues that Greece is the most unhelpful country the organization has dealt with in its 70-year history, according to two people familiar with the talks.

In a short and bad-tempered conference call on Tuesday, officials from the IMF, the European Central Bank and the European Commission complained that Greek officials aren’t adhering to a bailout extension deal reached in February or cooperating with creditors, said the people, who asked not to be identified because the call was private. The IMF’s press office had no immediate comment on the discussions.

Opinion: Biggest threat to the euro? The clowns who run Greece

Published: Mar 18, 2015 3:01 a.m. ET

MATTHEW LYNN

Greece may leave the euro by accident, thanks to incompetence of the clowns who rule it

Marketwatch: Syriza’s Amateur Hour Is The Biggest Threat To The Euro:

A finance minister who poses for spreads in Paris Match, while he is not blogging or tweeting. A prime minister who angrily demands reparations for Nazi crimes, and taunts the Germans for their past. The double act of the two men in charge of the Greek economy, Yanis Varoufakis and Alexis Tsipras, has been keeping the world’s media entertained. Anyone who follows them on Twitter will have enjoyed the controversy they stir up.

Greek Bills Sale Will Highlight Diverging Fortune From Spain’s

by Lukanyo Mnyanda

11:19 AM EET

March 18, 2015

(Bloomberg) -- A Greek short-term debt sale on Wednesday will demonstrate how countries that were at the forefront of Europe’s debt crisis have taken very different paths. Spain yesterday came close to selling bills that paid no interest.

Greeks Lining Up for Social Services Feel Cash Crunch Biting

by Maria Petrakis

1:01 AM EET

March 18, 2015

(Bloomberg) -- In the halls of the IKA state-welfare center on a recent rainy day in the Athens suburb of Neos Kosmos, Katerina Dimas and her eight-year-old son had front-row seats in the drama of Greece’s cash crunch.

Greece rejects 'blackmail', seeks meeting with top EU leaders

BY RENEE MALTEZOU AND COSTAS PITAS

ATHENS Tue Mar 17, 2015 5:45pm EDT

(Reuters) - Greek Prime Minister Alexis Tsipras wants to meet top European leaders at this week's EU summit, a Greek official said on Tuesday, as Athens insisted it would not be 'blackmailed' over its debt crisis.

Greece vs. Germany: It's getting really ugly

CNN Money

http://money.cnn.com/2015/03/17/news/economy/greece-germany-varoufakis-finger/

Did the Greek finance minister really show Germany the finger? The Germans think so, and they are fuming.

Germany's best selling newspaper Bild published a picture of Yanis Varoufakis' raised middle finger, taken from a YouTube video, on its front page Tuesday.

The threat of Greece exiting the eurozone looms large

By Sara Sjolin

Published: Mar 17, 2015 1:31 p.m. ET

Morgan Stanley sees 25% risk of Grexit over next six months

LONDON (MarketWatch) — With hefty debt payments looming, a shrinking economy and political tensions, Greece is far from out of the ‘Grexit’ woods yet, Morgan Stanley analyst said on Tuesday.

“Contrary to many commentators, we don’t think that the probability of a euro exit has diminished. While we’d still put it at one chance in four over the next six months, it feels as if we’re at the high end the range, and its probability may increase further,” they said in a note.

Greece: update on public finances

The State primary budget balance has returned almost in line with the target, but mostly due to expenditure cuts. Revenues continue to underperform.

by Silvia Merler on 16th March 2015

Bruegel

At the end of last week the Greek Finance Ministry published the preliminary budget execution bulletin for February. The State primary budget balance has returned almost in line with the target, but mostly due to expenditure cuts. Revenues continue to underperform.

Greece's Euro Exit Seems Inevitable

DRACHMA TRUMPS EURO?

MAR 17, 2015 3:00 AM EDT

By Mark Gilbert

Greece's money troubles resemble a game of pass the parcel, where each successive participant rips another sheet of wrapping paper off the box -- which turns out to be empty when the final recipient reaches the core. With time and money running out, a successful endgame seems even less likely than it did a week or a month ago. It's increasingly obvious that the government's election promises are incompatible with the economic demands of its euro partners. Something's got to give.

Greece Grabs Cash as More Than $2 Billion in Payouts Loom

by Nikos Chrysoloras, Vassilis Karamanis, Christos Ziotis

(Bloomberg) -- Greece will begin debating measures to boost liquidity as the cash-starved country braces for more than 2 billion euros ($2.12 billion) in debt payments Friday.

Unable to access bailout funding and locked out of capital markets, the government will outline emergency plans to parliament Tuesday to increase funding. Payments due March 20 include interest on a swap originally arranged by Goldman Sachs Group Inc., said a person familiar with the matter who asked not to be identified publicly discussing the derivative.

Germany and Greece should look to Goethe to resolve their standoff

The Guardian

Paul Mason

Two hundred years ago Germany’s great poet and statesman performed a U-turn that some would like to see Angela Merkel copy

On a quiet street in central Athens stands the bronze, modernist facade of the Goethe Institut, which has been teaching German and spreading enlightenment about German culture since 1952. Last week, the Greek government threatened to seize the building, together with holiday homes and other German assets. Greece is claiming €341bn (£240bn) in second world war reparations from Germany – and if the government does not confiscate the Goethe Institut, there are numerous people in Athens ready to do it “from below”.

Greece Optimist Throws in Towel Seeing Tsipras Go ‘Plain Nuts’

by Simon Kennedy

(Bloomberg) -- Erik Nielsen likes to spend Sunday mornings ruminating over the world economy at a cafe near his west London home.

Greek Crisis Tests ECB’s Credibility

The central bank must decide if Greek banks should be allowed to use scarce liquidity to roll over their existing holdings of T-bills

By SIMON NIXON

Updated March 15, 2015 10:14 p.m. ET

The Wall Street Journal

When the eurozone decided in 2012 to create a banking union, it did so largely because other ideas for deepening economic integration seemed too contentious. Ceding sovereignty over national banking systems was an easier political sell than, for example, handing Brussels new powers to borrow and spend.

Germany Won’t Negotiate With Greece Over Compensation for Nazi Atrocities

Athens should focus on tackling current problems, says spokesman

By ANDREA THOMAS

Updated March 11, 2015 2:02 p.m. ET

The Wall Street Journal

BERLIN—Berlin on Wednesday rejected mounting calls from Athens that Germany should pay compensation for Nazi atrocities in Greece, further souring the mood between the eurozone’s main paymaster and Greece’s cash-strapped government.

After a Greek government minister suggested Athens could seize German assets, a German government spokesman dismissed the threat as groundless and urged Athens to focus on a more pressing issue: Fulfilling the conditions for the release of much-needed financial aid.

Germans Tired of Greek Demands Want Country to Exit Euro

by Dalia Fahmy, Elisabeth Behrmann

(Bloomberg) -- Berlin cabdriver Jens Mueller says he’s had it with the Greek government and he doesn’t want Germany to send any more of his tax money to be squandered in Athens.

“They’ve got a lot of hubris and arrogance, being in the situation they’re in and making all these demands,” said Mueller, 49, waiting for fares near the Brandenburg Gate. “Maybe it’s better for Greece to just leave the euro.”

Italy, Spain to follow if Greece exits eurozone, says Greek defense minister

DW

Greece's Defense Minister Panos Kammenos has said his country's exit from the eurozone could be followed by Italy, Spain and even Germany. Kammenos' interview comes amid lack of progress in Greece's bailout plan.

Panos Kammenos, Greece's defense minister, spoke to German newspaper "Bild" on Saturday, saying his country's leaving the euro could precede an exit by Italy and Spain, followed by Germany in the future.

"If Greece explodes, Spain and Italy will be next and then at some point, Germany. We therefore need to find a way within the eurozone, but this way cannot be that the Greeks keep on having to pay," Kammenos told Bild.