Greece calls for bridging loan; anti-austerity protests in Athens - as it happened
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Version 0 of 1. 6.37pm GMT18:37 So, to quickly recap this afternoon’s events. Thousands of people have held a peaceful protest in Syntagma Square, against the ECB’s decision not to accept Greek bonds as loan collateral. It’s a rare show of support for a eurozone government over austerity. Photos start here. The Bank of Greece has assured the public that the nation’s banks are safe. Greece’s prime minister has vowed that the country won’t be ordered around any more. There’s speculation that Alexis Tsipras may also delay the announcement of his legislative programme until Sunday. And as covered earlier, Greece and Germany remain divided over the Greek bailout programme, as finance minister Yanis Varoufakis ends his tour of Europe. Our lunchtime Summary has all the details from the tense press conference with Wolfgang Schäuble. Thanks, and goodnight. GW 6.31pm GMT18:31 One more photo from Athens tonight: Syntagma square right now #Σύνταγμα pic.twitter.com/lGblHikpNE 6.05pm GMT18:05 Here’s a selection of photos from the peaceful rally in Syntagma Square tonight: 5.53pm GMT17:53 Greece’s central bank has promised savers that the country’s banks are “absolutely safe”, presumably in an attempt to avoid a bank run. Central bank governor Yannis Stournaras (a former finance minister), said (via Reuters): “The ECB’s decision [to no longer accept Greek bonds as collateral] can be taken back if there is a deal from the Greek government [and its EU partners]”. “Deposits and liquidity are absolutely safe.” 5.42pm GMT17:42 There is growing speculation in Greece tonight that the government will postpone the announcement of its programme policies by a day. Helena Smith reports that the Greek prime minister has signalled he will push back the hotly-anticipated statements until late Sunday which would give his 40-strong cabinet 24-hours longer to hone the policies. Helena explains: With creditors likely to be hanging on every word, Tsipras wants ministers to get the statements right, insiders said. The reforms that have caused such a stir among the EU, IMF and ECB - not least Tsipras’ promises to roll back on the more hated aspects of austerity - are expected to be expounded on when politicians outline their individual party programmes before the House. Interest in the programme has intensified following this week’s European tours by Alexis Tsipras and his finance minister Yanis Varoufakis. 5.41pm GMT17:41 The anti-ECB demonstrators have been able to reach the Athens parliament, thanks to the new government’s decision to remove the railings at Syntagma Square. People everywhere, under Parliament. Only veteran #Syntagma photogs & protesters can appreciate how rare this is. pic.twitter.com/HinHxEOLOg 5.32pm GMT17:32 The European Central Bank has clearly stirred up Greek anger, by tightening the pressure on Athens over its bailout programme last night. "The people of Europe are not blackmailed. They rise up". Banner at rally in responce to #ecb move - Athens #rbnews pic.twitter.com/QpMkWgMKZQ 5.20pm GMT17:20 There’s also a non-violent demonstration underway in the city of Thessaloniki: Semi - panoramic pic of the pro-gov rally in Thessaloniki. 800-1000 people participating. Very peaceful. #skg #5fgr pic.twitter.com/ix3OZYEXJI 5.06pm GMT17:06 The demonstration outside Athens’ parliament looks pretty peaceful: Yes, we can. Can't we? #Europe #Syntagma via @Souidos pic.twitter.com/JPLYrDA3Rc 4.45pm GMT16:45 There’s quite a crowd outside the Athens parliament now: Syntagma square anti-austerity pro-government protest now. Thousands here and more still coming.Greeks have no fear pic.twitter.com/STA73ScMDx 4.44pm GMT16:44 Tonight’s protest in Athens were organised over social media, after the European central bank raised the pressure on Greece by announcing that it wouldn’t accept its debt as security for loans any more. So, it’s a show of support for Alexis Tsipras’s government. "@mariapet: In Syntagma now, people gathering to support the government. Yep #interestingtimes" Must be a first since 2010 4.33pm GMT16:33 Anti-austerity protests in Athens Crowds have poured into Syntagma Square tonight for the anti-austerity protests: Greek Parliament entrance surrounded by people showing support for @atsipras #expections #toughtalks #Greece pic.twitter.com/uOa4h6D1ia Syntagma square anti-austerity protest, just now. Thousands here and ppl still coming. #Greece pic.twitter.com/MDKF5DNsrI #Greece Parlt plaza now RT @dromografos2: γέμισε σχεδόν και μπροστά στην #vouli #ECB #grexit pic.twitter.com/AGfOqJjd7W 4.29pm GMT16:29 Missed these tweets earlier, but they sum up the press conference rather well: Once again, @yanisvaroufakis says #Greece will let current bailout lapse at end of month. Most important substantive statement yet. Varoufakis giving full-blown critique of German-led approach to Greece, about two feet from guy who's led it. 4.00pm GMT16:00 Greece’s stock market clawed back some of its early losses, finishing the day down almost 3.4%. #Greece Athens stock exchange ended -3.37% from -9.43% at first minutes of session, banks ended -10% (opened -23%) 3.56pm GMT15:56 Photo-journalist Mehran Khalili reports that crowds are gathering in central Athens for tonight’s anti-austerity demonstration. Few hundred ppl already gathered in Syntagma for anti-austerity protest. All ages. #Greece The gathering was called after the European Central Bank announced last night that it would not accept Greek debt as collateral for loans. 3.52pm GMT15:52 Negotiations over the Greece bailout deal are going down to the final wire, predicts Jameel Ahmad, chief market analyst at Forex Time: Talks between the Greek Finance Minister Yanis Varoufakis and German Finance Minister Wolfgang Schäuble do not appear to have gone smoothly..... It was expected that the German Finance Minister would have a tough stance on the Greek debt situation and following the meeting taking place today, it doesn’t appear that uncertainty will be erased anytime soon over whether Greece will reach an agreement on its bailout programme with the rest of Europe. 3.44pm GMT15:44 The Wall Street Journal also reckons that Wolfgang Schäuble didn’t yield any ground today: Germany on Wednesday gave no encouragement to Greece’s request for a three-month bridge program that would give it more time to negotiate longer-term assistance, insisting that the newly-elected government implement the conditions tied to its current bailout. More here: Germany Cool on Greek Push for Bridge Program 3.33pm GMT15:33 The AFP newswire has published a story on Yanis Varoufakis’s warning that nazi support is rising in Greece: Greece needs Germany to combat neo-nazis: Varoufakis Greece needs Germany to help it counter the rise of the neo-Nazi Golden Dawn party, now the country’s third-biggest political force, Athens’ new Finance Minister Yanis Varoufakis said on Thursday. “Germany must be proud of the fact that Nazism has been eradicated here,” Varoufakis told a joint news conference after meeting with his German counterpart Wolfgang Schaeuble. “When I return home tonight I shall find myself in a parliament in which the third-largest party is not a neo-Nazi party, it is a Nazi party,” Varoufakis said, referring to Golden Dawn. The previous evening on German public television, Varoufakis had made reference to the economic crisis in the 1930s which had seen Adolf Hitler rise to power. “We need the people of Germany on our side. We need the people of Germany to help us in the struggle against misanthropy,” Varoufakis said on Thursday. He said that “never again” should a 1933-style depression be allowed “to divide proud European nations.” Schaeuble's face after Varoufakis brings up the Nazis. pic.twitter.com/pf3OpOJu9d Updated at 3.59pm GMT 3.25pm GMT15:25 Back in the Athens parliament, the new prime minister has vowed to end Greece’s austerity programme “once and for all”. Reuters has the details: In a defiant first speech to his left-wing parliamentary group after returning empty-handed from a European tour, Tsipras said Athens was no longer open to being told what to do. “Greece won’t take orders any more, especially orders through emails,” he said. “Greece is no longer the miserable partner who listens to lectures to do its homework. Greece has its own voice”. In an apparent reference to the tough stance taken by the European Central Bank and others, Tspiras said: “Greece cannot blackmailed because democracy in Europe cannot be blackmailed.” 3.10pm GMT15:10 The Financial Times agrees that Germany and Greece remain divided over key issues, following the Schäuble/Varoufakis talks: A showdown between the finance ministers of Greece and Germany on Thursday ended with the two sides as far apart as ever over solving Greece’s financial crisis. In a terse opening to a press conference after a meeting in Berlin, Wolfgang Schäuble said he and Yanis Varoufakis “agreed to disagree” over the proposals of the Syriza-led anti-austerity government, in what he described as “long and intensive” discussions. However, Mr Varoufakis rejected Mr Schäuble’s interpretation of the two-hour meeting, saying they did not “even agree to disagree”. “We did not reach agreement because it was never on the cards that we would. We agreed to enter into deliberations as partners with the orientation of a joint solution to European problems that’s going to put the interests of Europe at the helm,” he said. More here: Greek-German rift laid bare at press conference (£) Updated at 3.10pm GMT 2.48pm GMT14:48 With elections in Hamburg this month, Wolfgang Schäuble may have been keen not to look soft in his talks with Yanis Varoufakis, suggests Sony Kapoor of the Redefine thinktank: As widely anticipated #Schauble "we agreed to disagree" on discussion with #Varoufakis- is playing hardball particularly b4 Hamburg election 2.46pm GMT14:46 I’ve been back through the blog to tidy up a couple of typos and add more detail and quotes from the press conference - you might need to refresh. 2.20pm GMT14:20 The Financial Times’s editor takes an upbeat view of the Berlin talks: Optimistic take on Schauble-varoufakis is it cleared the air. Politicians - not ECB - must decide on compromise or Grexit Updated at 2.21pm GMT 2.14pm GMT14:14 Greek MPs looked rather worried as they took the oath in parliament today, reports our Athens correspondent Helena Smith. She tells me: Just got back from the opening of parliament - always a sombre affair - and can report that there was most definitely an air of nervousness about the place if the ritual itself was movingly historic. For the first time the vast majority of MPs took the civic oath - in a replay of their investiture last week. Pledges were made not to God but to the constitution. But even here, in the inner sanctum of the Greek temple of democracy, all eyes (and minds) where on Berlin and Yanis Varoufakis’ meeting with his German counterpart Wolfgang Schauble. I bumped into Makis Balaouras, newly elected with the radical left Syriza, who summed up the mood in a sentence. “Everything is going to be different, and everything is going to be difficult, with lots of pressure in and outside Greece.” Prime Minister Alexis Tsipras appeared pensive throughout. Updated at 2.21pm GMT 2.05pm GMT14:05 Summary: Varoufakis urges Europe to give Greece a bridging loan Greece’s new finance minister has urged the German government to support its call for a new deal on its debt. But the’s no sign of a breakthough in the crisis that is threatening to shake the eurozone again. Yanis Varoufakis ended his tour of European capitals in Berlin, by calling on Greece’s partners to support a three-month bridging loan. A bridging loan would buy time to end Greece’s end the mistakes of the past, he said. Today, Greece’s programme is flawed because it does little to tackle corruption and “rent-seeking”, and prioritises debt repayments over growth. Varoufakis also made no mention of taking a haircut on Greek debt. Instead, he pledged that the D-word (default) could be banished, so that Greece’s problems would no longer dominate the media. Varoufakis promised that Greece’s new government would unleash “a frenzy of reasonableness”, trying to dampen fears of radicalism. He urged European leaders to use the Syriza-led government to “turn the page” in Europe, even if they don’t approve of it. And he also cited the rise of the extremist Golden Dawn party, in an attempt to get Germany on side. He said he would return to a country where a Nazi party, not even simply a neo-Nazi one, was the third largest party in parliament. #Varoufakis making historically--charged appeal: Germany can be proud of our fight against nazis. We now need the German help. But the two finance ministers remain divided. Remarkably, Schäuble said they had “agreed to disagree” over the steps Greece must take, only to be contracted by Varoufakis who said they hasn’t even managed that. Varoufakis: We didn't even agree to disagree. ... We agreed to enter in deliberations as partners. So, upshot is that they disagreed on whether they agreed to disagree #Schaeuble #Varoufakis #Greece #Germany Schäuble showed obvious scepticism over Greece’s new government, saying that some of the measures announced do not go in the direction Germany wants to see. He argued that the Greek needs to stick to the commitments already made, and that its problems stem from Greece itself, not Germany. He also warned that Greece faces an uncertain future without a bailout programme -- suggesting he did not support Varoufakis’s call for a bridging loan. #Schäuble: A difficult question as to how Greece can access market financing without bailout programme - No agreement on this today. Schäuble also repeated his offer to send German tax officials to Greece. Got to love Schaeuble repeating his old offer to send 500 German tax inspectors to Greece. Not sure it would go down well in Greece.. #Schäuble: Greece desperately needs to fight corruption and reform tax collecting. And Schäuble also warned that support for the European project is falling in some countries. Highlights of the press conference start here. Updated at 4.17pm GMT 1.33pm GMT13:33 On the Nazi issue, some newswires are reporting that Yanis Varoufakis warned that Greece must prevent the serpent’s egg hatching, rather than warning it had already hatched (as I heard). *VAROUFAKIS: MUST PREVENT `SERPENT'S EGG HATCHING' IN GREECE Hopefully the official transcript will make it clear. 1.22pm GMT13:22 Some instant reaction to the press conference (scroll back to 12.16pm GMT for rolling highlights) Key Greek desire in the talks now seems to be a bridging loan. That is a big scaling back from last week. Predictable Nazi reference aside, on substance Varoufakis' wants: 1) Bailout programme to lapse end of month 2) Bridging deal until May A programme is a programme, 'bridging' or not. *VAROUFAKIS: BRIDGING PROGRAM WOULD HELP GREECE W/O AID PROGRAM 1.04pm GMT13:04 Varoufakis: Use us to turn the page Varoufakis ends with a call to European leaders to work with Alexis Tsipras’s government. You may not like the fact we were elected, but use us in the context of the European project to turn the page in Greece and in Europe. And with a flurry of shutters, the press conference is over. Summary to follow.... 1.02pm GMT13:02 Great picture of the press conference: Fotoğraf muhabiri mesleğinin tadını çıkarıyor :) Almanya Maliye Bakanı Schauble ve Yunanistan Maliye Bakanı Varufakis pic.twitter.com/ApAxPG5Z7w Updated at 1.02pm GMT 1.01pm GMT13:01 Which parts of Greece’s programme is the new government not prepared to meet? I could talk for hours, Varoufakis repies. But in brief, there are two fundamental problems with the current plan. 1) It doesn’t tackle the worst excesses of corruption and rent-seeking. Instead, it tries to fix Greece from the bottom-up, not the top down 2) It puts debt repayments ahead of repairing the Greek economy. And that means Greece can never recover. Varoufakis critique of the current reform program: 1) 67% of what's on the list are things we're OK with. Updated at 1.18pm GMT 12.59pm GMT12:59 12.57pm GMT12:57 Next question: What will Greece do if it can’t access money because it isn’t in a reform programme? And what’s happening about corruption such as Siemens (in which the German firm was caught up in a bribery scandal in Greece) Both men generously offer the other one the chance to answer first. Schäuble loses. Schäuble agrees that corruption needs to be clamped down on across Europe. On the money issue, Varoufakis says that a bridging programme will cover us while we agree a deal. And on corruption, Varoufakis says that each country must clean up its own act, but also work together: We have a major problem with tax evasion because of transfer pricing. We cannot tackle that on our own. We need your help. 12.51pm GMT12:51 Is there a danger that Greece will default? And why didn’t you come to Germany earlier, Mr Varoufakis? Varoufakis: We shall endeavour to do everything in our power to avoid a default. I’m sure that, with our partners, we can put this D-word out of court. Why didn’t we deliberate with our German partners? We haven’t even been sworn in yet, we haven’t put our programme before parliament. These are early days, but I’m sure that our policies will help to solidify Europe and provide a solution. But why weren’t you here earlier in the week? I’m here now, Varoufakis replies, waving his hands in the air. I’m not missing anyone out. 12.48pm GMT12:48 Onto questions.... Is Greece still in a bailout programme, or does the new government have the right to implement its manifesto? Schauble argues that it is. There’s nothing wrong with politicians delivering on election pledges, unless they are at odds with a country’s commitments. Europe only works if democratically elected politician work with each other after an election, he argues. Greece missed some of its targets for 2014, so we extended the bailout programme by two months. Now Varoufakis... He explains that the debt programmes since 2010 have simply been a case of “extend and pretend”, rather than fixing the problem. Varoufakis: #Greece and EU lost an opportunity to address the problem in 2010, treated insolvency problem as if it were a liquidity problem. Do we have the right to implement everything we promised? No, but we have the opportunity to present our mandate, and our partners can come with their mandates and we can hopefully reach a deal. A bridging loan, until the end of May, would allow us time to create a new contract with Europe. That would mean you wouldn’t need to fill your newspapers and TV stations with news about Greece. Updated at 1.03pm GMT 12.43pm GMT12:43 Updated at 12.44pm GMT 12.43pm GMT12:43 Varoufakis: Must fight rise of Nazis in Greece Varoufakis charms the German audience, saying that Berlin is a spiritual home for Greeks. And then he warns that the austerity crisis, and the debt trap it led to, can allowed “the serpents egg” to hatch within society. He says (updated with the full quotes) As finance minister in a government facing from day one emergency circumstances caused by a savage debt deflationary crisis, I feel that the German nation is the one nation in Europe that can understand us better than anyone else. No-one understands better than the people of this land how a severely depressed economy, combined with a ritual national humiliation and unending hopelessness can hatch the serpent’s egg within its society. When I return home tonight, I will find myself in a parliament in which the third-largest party is not a neo-Nazi party, it is a Nazi party. (that’s Golden Dawn). #Varoufakis making historically--charged appeal: Germany can be proud of our fight against nazis. We now need the German help. Updated at 6.25pm GMT 12.40pm GMT12:40 Varoufakis: Europe has reached a crossroads Europe is at a crossroads, Varoufakis says -- it must find a way to maintain its rules without crushing the flower of democracy with statements like “Elections do not change anything.” 12.39pm GMT12:39 My message to the people of Germany is simply - you can expect a frenzy of reasonableness from Greece. We will bring policies that help the average European. Expect from us an unwavering commitment to telling it as it is.... sound macroeconomic analysis and reforms that work. These are our commitments. We haven’t even been sworn in yet, and we seek that most precious of commodities, time. We need a bridging loan to give us time to talk to our partners. 12.37pm GMT12:37 We in Greece will stop at nothing to crack down on tax evasion, and also to combat the “rentiers” who are hurting the country, Varoufakis says. He’s now running through the history of Greece’s debt crisis, and how austerity and the “figleaf” of reforms forced on Greece since the crisis began led to Syriza’s electoral success. Updated at 2.46pm GMT 12.36pm GMT12:36 It is time to put an end to the “gross indignity” that has been forced on Greece, Varoufakis says, adding that the German people want an end to the crisis too. Schauble is a European statesman who has been playing a major role since the 1980s, Varoufakis says. And my message to him is that he can now help lead the European Union forwards. Updated at 2.42pm GMT 12.35pm GMT12:35 Varoufakis - we agreed to enter into deliberations as partners with orientattion to European solution for European problems, 12.34pm GMT12:34 Now it’s Varoufakis turn: Today I had the opportunity, pleasure and joy to lay out our priorities for a functioning Greece in a flourishing European monetary union. And he disputes the claim that they “agreed to disagree”! We didn’t discuss Greece’s debt schedule, he says. Instead, we set the scene for deliberations for an approach that will end this seemingly never-ending crisis, that began in Greece and spread across the eurozone. 12.33pm GMT12:33 Schäuble then makes a “personal statement”. I have been involved in European politics for years, for decades. The lesson of history is that a common Europe is the best thing for the region. I am worried that support for an integrated Europe is “slackening”. Updated at 2.43pm GMT 12.31pm GMT12:31 Schauble is now arguing that Greece cannot expect fresh debt relief. We went as far as we could last time, Schauble says....We can only provide help for people to help themselves. A new agreement would need the agreement of all parties involved... and the question is how can Greece gain access to the markets without a continuation of its programme? We didn’t get an outcome today. I think we agreed that a [debt] haircut is not on the agenda, it’s off the table, he adds. 12.30pm GMT12:30 I’m not getting the feeling that Schäuble and Varoufakis have made a major breakthrough in the debt crisis..... 12.29pm GMT12:29 I am sceptical to some of the measures announced by Greece, says Schäuble. Some measures don’t go in the direction we want to see. We “fully respect the mandate” given by the Greek people.... but that respect for diplomacy goes two ways. Schäuble: Varoufakis has told me that the reversal of reforms is not decided. | Really? Sounds like @Varoufakis scored a new jobs program for Greece in Berlin and that is about it. #Schaeuble #Greece 12.27pm GMT12:27 Reforms and investment are indispensable, says Schäuble.... And he lays out how Greece must reform its tax system: The measures announced by Greece are going in the right direction... wealthy people must pay their fair share of taxes, corruption must be rooted out. Germany is offering its expertise, Schauble adds, repeating his offer to send 500 German tax officers to Greece. That offer wasn’t taken up before, but it’s still on the table..... 12.25pm GMT12:25 Greece must continue to work with the IMF, the ECB and the EC, Schauble adds. Updated at 2.44pm GMT 12.23pm GMT12:23 We agreed to disagree, Schauble says, over the steps that Greece must take now. Updated at 12.24pm GMT 12.22pm GMT12:22 Schäuble says that he and Varoufakis probably wouldn’t be on the same side in an election battle (no argument there). Greece is making progress, the finance minister continues..... he cites falling employment and the creation of a primary budget surplus. 12.21pm GMT12:21 Schäuble adds that all European countries have suffered since the financial crisis. The most difficult journey in this process falls to Greece, this isn’t new, he says. We must understand how difficult it is for people in Greece - we must appreciate their efforts and progress... [but] Greece’s situation today is primarily caused by Greece’s own problems. Updated at 12.22pm GMT 12.20pm GMT12:20 Schauble: We weren't in full agreement Schauble goes first - saying he has had a very long and constructive exchange with Varoufalis We weren’t in full agreement, Schauble says, but that shouldn’t be a surprise. We are both in favour of European integration - we want a strong Europe, that has clout and stands its ground in the world. 12.18pm GMT12:18 12.16pm GMT12:16 Schäuble - Varoufakis press conference begins Finally, they’ve arrived... the press conference in the Berlin finance ministry is starting now. Reminder, there’s a live feed here. 12.16pm GMT12:16 There’s a new twist: to be reported! Russian president Vladimir Putin has waded in and called new Greek PM Alexis Tsipras, our correspondent Helena Smith reports “it is clear that there is going to be a future to this hot line,” says Mega TV. Regular readers will recall that the US president also waded in over the weekend declaring that Europe should begin focusing on growth and Greece should be given some slack. Last night, in what appears to be a watering down of that stance, the White House announced that Greece should toe the line and uphold the commitments it has made with its European partners. 12.15pm GMT12:15 A flicker of excitement sweeps the room... photographers strain to get a good view of the entrance... 12.10pm GMT12:10 Here’s the scene in the German finance ministry: 12.08pm GMT12:08 A good sign -- the live feed for the press conference between Wolfgang Schäuble and Yanis Varoufakis has burst into life.... 12.02pm GMT12:02 The press conference room at the Berlin finance ministry is packed. Just two men are missing.... Faire patienter le public d'une salle pleine à craquer, petit plaisir des concerts à guichets fermés #Varoufakis pic.twitter.com/9aUIiZVrY5 12.00pm GMT12:00 The Bank of England has left UK interest rates unchanged at 0.5%, and left its asset-purchase scheme unchanged too at £375bn. 11.57am GMT11:57 how very unGerman... 12:30 (CET) start & no #Varoufakis or Schaeuble in sight Link: http://t.co/WMKcrLw618 pic.twitter.com/3CBx19w4yB 11.49am GMT11:49 How bad could it be?... @SpiegelPeter Or fighting maybe? 11.48am GMT11:48 This delay might be a good sign.... Schäuble-Varoufakis meeting taking a bit longer than planned. Real negotiations? Or it might not.... @YanniKouts Or lecturing at each other? Updated at 11.49am GMT 11.46am GMT11:46 There’s a crowd of media in the press conference room in Berlin, waiting.... Updated at 11.47am GMT 11.44am GMT11:44 Either I’ve got the time of this press conference wrong, or it’s running late, or the live feed isn’t working.... 11.35am GMT11:35 No action in Berlin yet...but back in Greece, the former prime minister Antonis Samaras has been speaking to his New Democracy party: Samaras to his MPs: We'll back efforts that help country, Syriza will be obliged to break campaign promises #Greece pic.twitter.com/KFkBAet49P 11.20am GMT11:20 Just 10 minutes until the press conference between finance ministers Schäuble and Varoufakis begins... Noch sprechen #Schäuble und #Varoufakis hinter verschlossenen Türen miteinander. Pressekonferenz um 12:30 Uhr. pic.twitter.com/9CoklowNC4 11.05am GMT11:05 11.04am GMT11:04 A group of demonstrators gathered outside the German finance ministry in Berlin, holding signs reading “We start from Greece, we change Europe”. Berlin Soli demonstration for #Varoufakis in front of Schäuble's Castle pic.twitter.com/Mf8UfU77J9 Updated at 11.07am GMT 10.58am GMT10:58 Our Berlin correspondent, Kate Connolly, reports that conservative daily Die Welt has tries to explain why Varoufakis will be received with a certain amount of skepticism in Germany, not least because of what is viewed as his scruffy dress habits, and bully-like manner. Here’s a flavour of Die Welt’s editorial, from Kate: “Varoufakis, the libertarian communist, is coming (to Germany) as if for a dog fight, his shirt not tucked into his trousers, an open collar. He is threatening, he is complaining, he wants victory - above all over Germany. Because of such a scholarly ruffian no one should feel they have to shit their pants, otherwise we’re bound to lose. With this background, it’s good that the federal government has so far held back. Only when it’s made known what concrete facts and comprehensible figures the Greeks are going to come up with, can any sort of compromise be negotiated”. 10.56am GMT10:56 The two finance ministers have posed for a photo too: @yanisvaroufakis and #Schäuble. pic.twitter.com/KDRjvM5oQ6 10.50am GMT10:50 Greek finance minister Yanis Varoufakis has arrived at the Finance Ministry in Berlin for talks with Wolfgang Schauble. Judging by this Reuters photo, he looked pretty relaxed despite the ECB’s move last night: Updated at 10.51am GMT 10.33am GMT10:33 French president Francois Hollande has backed the ECB’s collateral changes, Reuters reports: 10.20am GMT10:20 Bookmaker Paddy Power has cut its odds on Greece leaving the euro in the next three years. It is now offering 3/1 on Grexit , down from 4/1. The odds on Greece holding another general election in 2015 have been also cut from 11/4 to 9/4. A spokesperson for Paddy Power said: “The Greeks haven’t been this cornered since the battle of Thermopylae and further pressure from the ECB could lead to Syriza backtracking on their commitment to keep Greece in the Eurozone.” 10.17am GMT10:17 Live ab 12:30h: Pressekonferenz mit @yanisvaroufakis und Wolfgang #Schäuble http://t.co/TF6MqxWl8z pic.twitter.com/IJImJK1WuI 10.12am GMT10:12 For the first time since 2007, the economy of every country in the EU is expected to grow this year #ECForecast @ecfin @EU_Commission 10.09am GMT10:09 ..Greece growth forecasts cut However, the EC has cut its forecast for Greek growth this year. It now expects Greece’s economy will expand by 2.5%, down from 2.9% – and that’s before the recent political instability Interestingly @EU_Commission only downgrades #Greece 2015 growth 2.9% to 2.5%. But that's based on completing bailout. Which isn't happening 10.08am GMT10:08 Pierre Moscovici, Commissioner for Economic and Financial Affairs, says: “Europe’s economic outlook is a little brighter today than when we presented our last forecasts.” 10.07am GMT10:07 EC predicts faster eurozone growth.... Breaking: The European Commission has raised its growth forecasts for the eurozone, but the outlook still looks tough. In its new forecasts, the EC predicts that eurozone GDP will rise by 1.3% in 2015, up from 1.1% three months ago. It believes the lower oil price, and the ECB’s new quantitative easing programme, will boost activity in the sluggish economy. Previsiones de Invierno de la Comisión Europea para España en 2015 y 2016 pic.twitter.com/ad0PKYHnGf 9.57am GMT09:57 Back in the Athens parliament, many MPs are taking a civil oath (echoing prime minister Tsipras’s own swearing-in last week) moving moment: majority of new Greek Parliament taking civic Oath; 135/ 300 new parliamentarians. Konstantopoulou the Parlament president 9.47am GMT09:47 We’re expecting Yanis Varoufakis and Wolfgang Schäuble to hold a press conference in Berlin at 12.30pm local time, or 11.30am GMT [1.30pm for readers in Greece]. We will be covering press conference of Greek Finance minister Varoufakis in Berlin. Live on @Ruptly at 12:30h CET pic.twitter.com/Gd8uHj1WsH 9.44am GMT09:44 Over in Athens, the new parliament is being sworn in by the country’s religious leaders: #Greece: new parliament is being sworn in by the head of the Orthodox Church of Greece #Vouli pic.twitter.com/oO2nJyp0oy Christian oath administered in #Greece's parliament. MPs from New Democracy, IndGreeks, GoldenDawn raise right hand pic.twitter.com/3BVPiH1srT Updated at 9.48am GMT 9.44am GMT09:44 The Greek government insists that the ECB’s move is designed to put pressure on all sides, rather than an attack on Athens. In a statement, an official says: “Greece does not aim to blackmail anyone but will not be blackmailed either... The ECB’s decision ... is an act of political pressure to quickly reach a deal.” 9.40am GMT09:40 More reaction from the financial community.... .@ECB move on Greece equivalent of taking the safety catch off. Refusal to allow ELA would be pulling the trigger. All I have to say is "everybody calm down" on #Greece - give them a little bit of time & Oh & if you don't understand #ECB don't trade 9.27am GMT09:27 Greek government: We won't be blackmailed A Greek government official has urged calm, telling Reuters that the country’s banking system remains protected - and insisting that the country will not be “blackmailed”: 9.10am GMT09:10 Bank of Piraeus' insane ride in the last two weeks -51%, surged back, down another 27% today http://t.co/5KJ3fv9bHB pic.twitter.com/mjcUXhQZgL 9.05am GMT09:05 Shares in Greece’s major banks have plunged by over 25%, as the ECB’s decision to tighten their access to cheap liquidity spooks the Athens market: And investors are bailing out of Greek debt, sending the yield on its three-year bonds soaring to almost 20%. That shows a serious risk of the debt being defaulted on. Greece 3-year note yield +350bps. UGLY pic.twitter.com/ncLrECtrvR 8.52am GMT08:52 This isn’t the first time that the European Central Bank has faced accusations of meddling in politics; its decisions have helped shape the path of the eurozone crisis: For those arguing @ecb singling out @syriza_gr because of their politics, remember Ireland (2010), Spian (2011), Italy (2011), Cyprus (2013) 8.50am GMT08:50 The ECB’s decision is a blow to Alexis Tsipras’s government because it gives them much less time to haggle a deal. The existing bailout runs out at the end of February, at which point Mario Draghi and colleagues may well bar Greek banks from its emergency funding window [although that’s not guaranteed to happen] ECB compressing time is bad for Syriza. They'll have to give more, accept less in return to get a deal fast. That's why they wanted months. 8.44am GMT08:44 Greek stock market tumbles 9% The Greek stock market has plunged almost 9% at the start of trading, as bank shares plummet by almost a quarter.... The ECB’s move may be political, but it’s already shattering the fragile confidence that Athens might cut a deal with its lenders to ease its debt burden. #Greece Athens stock exchange begins session -8.93% #Greece Banks after minutes in session -23% Updated at 8.44am GMT 8.40am GMT08:40 Greek bonds weaken as fears grow Greek bonds have fallen sharply in value this morning following the ECB’s move. This has driven up the yield (or interest rate) on its 10-year debt by a whole percentage point, from 10.01% to 11.08%. 8.38am GMT08:38 Financial bloggers split over ECB’s move. Karl Whelan, professor of economics at University College Dublin, argues that people shouldn’t panic: At least, unlike in its previous “Fight Club” days, the ECB now admits that ELA is available and will step in to take the place of the regular Eurosystem lending that has been revoked. So there are no immediate implications for liquidity provision to the Greek banks. The ECB is flexing its muscles, letting everyone know that are very close to pulling liquidity from Greece but no funds have been withdrawn yet.... On the positive side, this decision simplifies matters to their essence. As in Ireland and Cypus previously, whether the Greek banks can keep operating depends on the ECB’s discretionary decision on whether to keep approving ELA [emergency liquidity assistance]. And, as with those previous cases, the ECB has decided what it wants in return for ELA and is determined to get its way. More here: So What Did ECB Just Do To Greece? But one curious element in this story is that Yanis Varoufakis predicted that the ECB might threaten not to accept Greek debt as collateral, back in 2012 (!) Snapshots of this tweet have gone viral since last night #Greece #ECB #Varoufakis pic.twitter.com/gPnPzBubad So why would Draghi make a move already anticipated by his (game theory-loving) opponent? Unless, as Frances Coppolo asks, it’s really all about Germany... Varoufakis is gambling that the Eurozone, and more particularly Germany, will not dare to push him off the cliff because of the consequences for international political relations. If Germany was seen to force Greece out of the Euro by refusing to negotiate, it would become an international pariah. There are already voices reminding Germany of its own debt forgiveness in 1953, and anti-austerity movements in many other Eurozone countries would only be encouraged by Germany and/or the ECB looking like bullies. Forcing Greece out of the Euro could result in the disorderly unravelling of the whole thing. I may be completely wrong, but this looks far more plausible to me than a simple explanation that fails to take account of the signals given by both Varoufakis and Draghi. In which case, Schäuble should beware. His position is nowhere near as strong as he thinks. He is dangerously close to the cliff edge himself. If Germany pushes Greece over the edge, Greece may well take Germany down with it. More here: What on earth is the ECB up to? 8.24am GMT08:24 Greece debt fears hits European markets European stock markets have fallen this morning, with the FTSE 100 shedding 50 points, or 0.75%, to 6809. Mike van Dulken, head of research at Accendo Markets, says Greece’s debt crisis is hitting shares: The negative open comes after the ECB suspended its waiver of Greek bonds being used as collateral as part of its current bailout program. Although this doesn’t affect counterparty status of Greek banks, who can still get liquidity via Emergency Lending Assistance (ELA), when coupled with existing political stubbornness it has revived fears of a messy Greek conclusion with the country potentially running out of money by March. 8.15am GMT08:15 #ECB announcement following #Varoufakis #Draghi meeting highlights anxiety over #Greece bailout. #Schaeuble meeting in #Germany later today 8.08am GMT08:08 The European Central Bank’s chief economist has defended removing the waiver that allowed junk-rated Greek bonds to be used as security for ECB loans. Peter Praet told Les Echos, the French newspaper, that it was simply following its own rules: “The conditions of access to liquidity from the European Central Bank are clear...If the conditions are not met anymore, the ECB must draw the consequences.” Updated at 8.15am GMT 8.04am GMT08:04 Anxious Europeans might also be interested in this petition calling for debt relief for Greece, from economist Philippe Legrain (a former advisor to European Commission president President Barroso). Please RT... Demand debt justice for #Greece. Sign our petition at http://t.co/flJ9nVuhhQ … We need a #EuropeanSpring Follow @EuropeSpring 7.58am GMT07:58 Greeks unhappy with the ECB’s move have called a rally in Syntagma Square tonight, the site of many protests since the debt crisis began: Rally in #Syntagma Thursday 6pm EET following #ECB announcement https://t.co/koQ3lRoIlU Seeing the turnout will be interesting. #Greece social media in #greece calling people to syntagma tonight for rally against #eu "blackmail" (that’s 4pm GMT) Updated at 8.15am GMT 7.47am GMT07:47 ECB hits Greece with collateral blow - what the experts say The European Central Bank’s decision to no longer accept Greek debt as collateral will force its government to moderate its position, predicts Gary Jenkins of LNG Capital: Greek financial institutions will still have access to liquidity via the emergency liquidity assistance programme via the Greek central bank, although the ECB gets to review this use every two weeks. So a very large warning shot has been fired across the Greek bows by the ECB. It is difficult to see this as anything other than a very aggressive move by the ECB. They did not need to do it now (they were expected to have to make a decision at the end of the month) and whilst they can claim that they are following their rules they have oft amended them during the crisis, as has the Eurozone as a whole. After all, there are not supposed to be any bail outs… Krishna Guha, vice chairman of Evercore ISI, told the WSJ: “This is consistent with our expectation that the ECB will take a hard line on Greece. Stan Shamu of IG says the ECB’s move will puncture the optimism that built up around Greece in recent days, and could alarm savers. The ECB went as far as saying it can no longer assume bailout negotiations will be concluded successfully. Given Syriza was voted in to make some changes and take an aggressive stance, many now fear this will not be taken easily by the Greek population if the new government yields. Additionally, the ECB announcement is likely to result in a run on the banks.... And Carsten Brzeski of ING suggests that Yanis Varoufakis’s meeting with ECB chief Mario Draghi yesterday may have backfired on Greece: Some might now say that the Draghi did not like what he heard from Varoufakis so that he decided to tighten the screws. The pressure on the new Greek government not to exit the current bailout programme has clearly increased. Updated at 7.48am GMT 7.37am GMT07:37 The ECB’s surprise move on Greek debt last night even sparked an exchange between Channel 4’s Paul Mason, and the ECB’s head of comms Michael Steen: Where @paulmasonnews and the @ecb head of comms have a row about Greece pic.twitter.com/OSd3fCYDCP 7.30am GMT07:30 Varoufakis meets Schäuble, after ECB debt shock Good morning. Today, the finance minister of Greece’s new democratically elected government is in Berlin, meeting his democratically elected counterpart to discuss his proposal to ease the debt crisis gripping his country. But Yanis Varoufakis’s showdown with Wolfgang Schäuble has been overshadowed by a dramatic intervention by the unelected masters of the monetary universe in Frankfurt. The ECB stunned the financial world last night, and intensified the pressure on Athens, by announcing that it will no longer accept Greek bonds as collateral from banks when dishing out loans. The EBC blamed the decision to remove the existing waiver on junk-rated Greek bonds on the new Greek government’s determination to agree a new bailout agreement, rather than fall into line and continue to implement austerity measures. Or as it put it: The Governing Council decision is based on the fact that it is currently not possible to assume a successful conclusion of the programme review and is in line with existing Eurosystem rules. ECB lifts waiver of minimum credit rating requirements for marketable instruments issued or guaranteed by Greece http://t.co/zhFVuGS76b The decision to remove the waver hit the euro, and will probably cause a panic on the Athens stock market this morning. The move split commentators and experts Some argue it’s a rational response to the Greek crisis - as the ECB cannot be sure that Greece’s debt will remain safe.... The only surprise of ECB decision was timing. But what do you expect with Tsipras grandly telling everyone won't ask for program extension? ....Others feel it’s an unacceptable intervention into the democratic process. The ECB - sorry, who elected you? - trying to crush Greece's elected government because they fear its example. An attack on democracy. Even if the truth lies somewhere in the middle, the ECB’s move has certainly ratcheted up the Greek debt crisis another notch, and potentially made it much harder for prime minister Tsipras to negotiate a new debt deal. We’ll be tracking all the reaction, the Varoufakis-Schäuble meeting, and other economic and financial news today (spoiler alert: the Bank of England will leave interest rates on hold at midday UK time).... Updated at 7.34am GMT |