tions.” This is what seasoned banking executives
say whenever given the opportunity, adding that
“the financing link between the state and the
banks was severed on February 11th, when the
European Central Bank revoked the waiver” (that
allowed banks to use Greek government debt as
collateral for loans).
It has to be pointed out that —always in accordance
with the same sources— despite the reaction and
the communication offensive of the Greek govern-
ment (which spoke of a double standard), it was
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62
clear from the outset that the lenders would not give
the go ahead for increasing the €15 billion limit in
regard to the issuance of treasury bills, as they had
done in August 2012.
To what extent, though, can the condition of
Greek systemic banks be affected by the govern-
ment’s decision to use the deposits and reserves
of state agencies —effectively taking on domestic
debt— to repay its debt obligations?
Bank officials emphatically state that “there will be
no problem.” As they say, this is not a matter of
billions of euros and “the system can withstand
such outflows.”
April: a crucial month
However, the key issue is to ensure that the
asphyxiating conditions, which are getting worse
day by day, will not persist in April. The leadership
of the banking system is greatly concerned that,
in such a case, the problem will be huge.
Successfully covering —notwithstanding the
appropriateness of the method— the obligations
for March, does not automatically deal with those
for April. In case lenders continue to shy away
from providing financial assistance to the country,
Athens will be faced with an extremely distressing
”
“
Bank officials emphatically
state that “there will be no
problem.” As they say, this
is not a matter of billions
of euros and “the system
can withstand such
outflows.”
