The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
Greek banks would no longer have access to refinancing with the ECB
This is the policy decision that should be highlighted.
There is no law of nature, or of economics, or of the European Union that states that the ECB can not rediscount new Greek bonds that are used to recapitalise the "good bank" part of the Greek banks, after the bondholders, management, interbank loans and deposits above the guarantee limit have been destroyed. Those new bonds will be if not pristine then at least much lower risk by any rational analysis than the old Greek bonds. Refusing to rediscount the new bonds while being prepared to rediscount the old bonds is an explicit admission that at least one of the following is true:
So, if you have a Greek bond and supposedly you can sell it at a 50% discount in the secondary market, why could you not repo it at a 60% discount?
Economics is politics by other means
Austerity can only be implemented in the shadow of a concentration camp.
by Migeru - Jan 31 45 comments
by afew - Jan 28 30 comments
by melo - Jan 23 4 comments
by gmoke - Jan 15 5 comments
by DoDo - Jan 20 4 comments
by Frank Schnittger - Jan 16 111 comments
by ChrisCook - Jan 1 66 comments
by Migeru - Jan 3145 comments
by afew - Jan 2830 comments
by melo - Jan 234 comments
by DoDo - Jan 204 comments
by Frank Schnittger - Jan 16111 comments
by gmoke - Jan 155 comments
by afew - Jan 550 comments
by rifek - Jan 59 comments
by DoDo - Jan 25 comments
by ChrisCook - Jan 166 comments