Troika Exploits Greek Bank Run As Varoufakis Slams “Pernicious” Banking Sector “Leaks”
As expected, no progress was made between Greek FinMin Yanis Varoufakis and EU finance ministers at Thursday’s Eurogroup meeting in Luxembourg. Varoufakiswarned his counterparts that Europe was very close to “accepting” a Greek “accident”, something the FinMin said EU officials have a “moral duty” to avoid before “uncontrollable events” occur. Varoufakis also implicitly accused the troika of attempting to incite a bank run.
While it wasn’t entirely clear what Varoufakis meant by “uncontrollable events,” it seems likely he’s referencing the fact that while politicians may be able to push back their own self-imposed deadlines as many times as they wish even to the point of rendering the entire effort “ridiculous”, — to use German Vice Chancellor and Economy Minister Sigmar Gabriel’s words — the reality on the ground in Greece is that the economy is collapsing on itself and deposit flight is now running above at €750 million euros each day. Put simply: an acute crisis of confidence among the Greek populace now risks plunging the country into a state of emergency.
In an attempt to address the quickly deteriorating situation, Brussels looks set to impose capital controls as early as this weekend and has scheduled an emergency summit on Monday. EU finance ministers will reportedly hold another meeting ahead of the summit. WSJ has more:
Eurozone leaders will try to clinch a deal on Greece’s flailing bailout at a hastily called crisis summit Monday, after finance ministers failed again to bridge the gap between Athens and its lenders.
The summit—eight days before Greece’s eurozone rescue runs out—will be one of the last chances to avert the specter of further economic meltdown for Greece and a messy exit from the eurozone.
After five months of fraught negotiations, “it is time to urgently discuss the situation of Greece at the highest political level,” said Donald Tusk, who presides over meetings of European leaders.
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