Brussels, 23/03/2015 (Agence Europe) - The Greek government “should commit to honour its debt obligations to all its creditors and to premise all future policies on this commitment”, Mario Draghi, the president of the European Central Bank, told the committee on economic affairs of the European Parliament on Monday 23 March. This appeal follows the revelation by the Financial Times that the Greek Prime Minister, Alexis Tsipras, had warned the German Chancellor, Angela Merkel, that the Greek government's cash flow problems were becoming pressing to the point that the country may cease to be able to honour its financial commitments within the next few weeks.
“Given that Greece has no access to money markets, and also in view of the 'spikes' in our debt repayment obligations during the spring and summer of 2015 (primarily to the IMF), it ought to be clear that the ECB's special restrictions combined with the disbursement delays (of tranches of aid: Ed) would make it impossible for any government to service its debt obligations. Servicing these repayments through internal resources alone would, indeed, lead to a sharp deterioration in the already depressed Greek social economy”, Tsipras wrote in a letter published by the Financial Times on 15 March.
Tsipras also criticised the ECB's decision, in early February, to withdraw the waiver allowing Greek banks to refinance themselves using its money using the Greek debt as collateral. The banks are now having to take funding via more expensive emergency liquidity ('ELA'). The Greek Prime Minister also writes that the ECB raised the ceilings of the ELAs at shorter intervals than normal and at rather small increments “that incite speculation and spread uncertainty vis-a-vis Greece's banking system”.
Mario Draghi said that he was confident that the waiver could be reinstated in the future, but the conditions for this to happen have not yet been met, he explained. Banks are having to deal with mass withdrawals and the President of the Eurogroup, Jeroen Dijsselbloem, suggested last week that controls on movements of capital may be needed. However, Christian Noyer, a member of the Governing Council of the ECB, stressed that this would be a very last resort. Lastly, Tsipras also expressed disappointment that the ECB had declined to raise the ceiling on the treasury bonds that Greek banks can buy beyond the level they had as of 18 February of this year, despite being virtually the only buyers of Greek treasury bills.
The question of short-term financing is to be discussed by the Greek leader and the German Chancellor in Berlin on Monday, with a particular view to 8 April, the date on which the Greek government is likely to find itself short of cash. It has to pay €465 million back to the IMF on 9 April. “It's interesting for the Chancellor to hear from the Greek Prime Minister's mouth what his ideas are” for economic reforms, the Chancellor's spokesperson, Steffen Seibert, said on Monday. “There will not be any disbursement before there is a real test that the reforms have been approved and implemented”, the Spanish Finance Minister, Luis de Guindos, said in an interview with Sunday's Financial Times. “Strong political will in itself doesn't suffice, it must translate into actions and progress”, said Commission spokesperson Margaritis Schinas.
The Greek government was also planning to raise the question of the war compensation it is claiming from Germany. The German Foreign Ministry commented that this chapter is closed, both politically and legally. (Elodie Lamer)