We cannot rule out the possibility that the ECB
will keep on pursuing the same policy even after
the end of the four-month period. It all depends on
the government,” says a bank executive, mean-
ingfully adding: “Unless the government does the
unexpected and before April is out realises some
symbolic reform, which will demonstrate its inten-
tion to honour the agreement.”
Moreover, the fact that the European Central
Bank has left Greece out of the quantitative eas-
ing game and the corresponding downpour of
money and liquidity that has been soaking the
Euro zone since March 9th, has —apart from its
strictly financial reasons— its own semiotics in
regard to Greece’s place in the single currency.
“Draghi’s decision may be a temporary one,” esti-
mate some analysts, “until Greece implements
the programme and takes the appropriate meas-
ures; but this move clearly shows that, if things
are not expedited, the country —and its banking
system— run the risk of missing the train of devel-
opments in the Euro zone.
“This is not to say that we will be shown the exit
from the Economic and Monetary Union; but the
isolation of the country within the Euro zone will
be very painful and will sent severe shocks
throughout the economy, and the banking system
in particular.”
Draghi’s red lines
According to certain analysts, well versed in the
ways and tactics of Frankfurt, the central banker’s
comment that “It’s absolutely essential that [the]
solvency [of Greek banks] be maintained” is not a
mere theoretical statement. Quite the contrary.
In essence, it describes the red lines that the
European Central Bank will draw in the negotia-
tions with Athens, red lines that concern —and
adversely affect— the banks’ capital adequacy.
This comment mainly refers to the issue of deal-
ing with the “red loans” (as non-performing loans
are called), in regard to which the government
had made many promises —both before and after
the elections— to households and businesses
alike.
The Frankfurt side is expected to play hardball
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