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UK draws up contingency plan as Bank of Greece warns of 'uncontrollable crisis' - live updates UK draws up contingency plan as Bank of Greece warns of 'uncontrollable crisis' - live updates
(35 minutes later)
1.12pm BST13:12
Protests planned in Athens tonight.
Far left elements inside the Syriza party are now calling on Greeks to take en masse to the streets, giving Alexis Tsipras another headache.
From Athens, Helena Smith reports.
More and more MPs on Syriza’s far left are saying that even if an agreement is reached it will never be enforced. “The proposals made by lenders can only be passed with tanks and if the lenders want to pass them they have to find the tanks,” Stathis Leoutsakos, a prominent Syriza party member told the local radio station Parapolitika 90,2 this morning.
“I don’t mean tanks in the classic sense of the word. Today tanks have been replaced by a communications game that they play in great skill in the euro zone.”
It was wrong to say that Greece and its creditors had reached total impasse, he said adding that the cost of throwing the debt-choked country out of the currency bloc would be much higher than keeping it in.
“I don’t believe [euro exit] would be a catastrophe. Despite the difficulties our country would have acquiring a new national currency, it could be a way out.”
Ratcheting up the rhetoric, Syriza’s Far Left Platform called on people to take to the streets in protest. Mass demonstrations in towns around Greece are being lined up for this evening.
Christos Kasimis wrote on the Left Platform’s website ISKRA:
“It is clear that after five months of so called negotiations, creditors are clearly trying to impose a destructive agreement on the Greek people.”
12.44pm BST12:4412.44pm BST12:44
Back in Athens, Alexis Tsipras warned that he would give Europe the “big no” if an acceptable deal cannot be reached.Back in Athens, Alexis Tsipras warned that he would give Europe the “big no” if an acceptable deal cannot be reached.
Speaking at today’s press conference with Austrian chancellor Werner Faymann, the Greek PM said:Speaking at today’s press conference with Austrian chancellor Werner Faymann, the Greek PM said:
“We have only one option and that is to find a solution that will be accepted and passed by the government and the parliament.....“We have only one option and that is to find a solution that will be accepted and passed by the government and the parliament.....
If we do not have an honourable compromise, we will once again say the big no.”If we do not have an honourable compromise, we will once again say the big no.”
Tsipras added that he’s thanked Faymann for his words of support this morning.Tsipras added that he’s thanked Faymann for his words of support this morning.
Faymann trifft Tsipras. pic.twitter.com/Lwn4uqTpPgFaymann trifft Tsipras. pic.twitter.com/Lwn4uqTpPg
Updated at 12.44pm BST Updated at 1.20pm BST
12.29pm BST12:2912.29pm BST12:29
The German government has reiterated that it doesn’t want Greece to leave the eurozone.The German government has reiterated that it doesn’t want Greece to leave the eurozone.
But a spokesman has also warned that it will be hard to reach a deal at tomorrow’s Eurogroup meeting, as Athens has not tables any new proposals:But a spokesman has also warned that it will be hard to reach a deal at tomorrow’s Eurogroup meeting, as Athens has not tables any new proposals:
Reuters has snapped the details:Reuters has snapped the details:
12.20pm BST12:2012.20pm BST12:20
Schulz: Leaving the euro means leaving the EUSchulz: Leaving the euro means leaving the EU
Ian TraynorIan Traynor
Martin Schulz, the president of the European Parliament, has told the Guardian that Greece could end up out of the European Union.Martin Schulz, the president of the European Parliament, has told the Guardian that Greece could end up out of the European Union.
Speaking to our Europe editor, Ian Traynor, Schulz said others took different views but:Speaking to our Europe editor, Ian Traynor, Schulz said others took different views but:
“I think that leaving the euro is also leaving the European Union”.“I think that leaving the euro is also leaving the European Union”.
All EU countries have to commit to the euro except the UK and Denmark, due to the opt-outs negotiated in the Maastricht Treaty.All EU countries have to commit to the euro except the UK and Denmark, due to the opt-outs negotiated in the Maastricht Treaty.
There’s no legal avenue in treaties for leaving the euro, Schulz said, adding:There’s no legal avenue in treaties for leaving the euro, Schulz said, adding:
‘Legally it’s unclear.’‘Legally it’s unclear.’
That squares with the Bank of Greece’s warning this morning that, without a bailout agreement, Greece could be forced down a “painful course” resulting in its exit from both the eurozone and the EU.That squares with the Bank of Greece’s warning this morning that, without a bailout agreement, Greece could be forced down a “painful course” resulting in its exit from both the eurozone and the EU.
12.05pm BST12:0512.05pm BST12:05
Back at the Athens press conference, Alexis Tsipras has said he’s not planning to ask voters for a fresh mandate - implying no early elections or a referendum.Back at the Athens press conference, Alexis Tsipras has said he’s not planning to ask voters for a fresh mandate - implying no early elections or a referendum.
He also vows to take responsibility if an “honourable compromise” is reached (ie, if it doesn’t live up to the pledges he made before winning January’s general election)He also vows to take responsibility if an “honourable compromise” is reached (ie, if it doesn’t live up to the pledges he made before winning January’s general election)
Tsipras says gov't has no intention of seeking new mandate (elections/referendum) from voters regarding negotiations with lenders #GreeceTsipras says gov't has no intention of seeking new mandate (elections/referendum) from voters regarding negotiations with lenders #Greece
Tsipras says if there's "honourable compromise" with lenders, he & his gov't will take responsibility for pasing & implementing deal #GreeceTsipras says if there's "honourable compromise" with lenders, he & his gov't will take responsibility for pasing & implementing deal #Greece
11.54am BST11:5411.54am BST11:54
Britain's Greek plan covers businesses, banks, the City....Britain's Greek plan covers businesses, banks, the City....
Rowena MasonRowena Mason
My colleague Rowena Mason has just emailed from Parliament, with details of Britain’s plans to protect itself against the Greek crisis.My colleague Rowena Mason has just emailed from Parliament, with details of Britain’s plans to protect itself against the Greek crisis.
The prime minister’s official spokeswoman said contingency planning was looking at the potential impact on businesses, banks, the financial sector and tourism, among other areas.The prime minister’s official spokeswoman said contingency planning was looking at the potential impact on businesses, banks, the financial sector and tourism, among other areas.
She said:She said:
“The chancellor was talking in the House yesterday about the potential exit of Greece and how that presents serious economic risks and of course as part of that we take all steps to protect ourselves from such eventualities...“The chancellor was talking in the House yesterday about the potential exit of Greece and how that presents serious economic risks and of course as part of that we take all steps to protect ourselves from such eventualities...
You will expect we are continuing to make sure we have the right plans in place and stepping up operations given where discussions have got to. We don’t go into the specifics of these plans but of course they will be looking at how do we make sure we have looked at the impacts on business, the banks and the financial sector and tourists....You will expect we are continuing to make sure we have the right plans in place and stepping up operations given where discussions have got to. We don’t go into the specifics of these plans but of course they will be looking at how do we make sure we have looked at the impacts on business, the banks and the financial sector and tourists....
This is about making sure we are as prepared as we can be. Of course, the potential default does present some serious economic risks, so alongside contingency plans it is about making sure we have an economy that is growing and that our public finances are in good order.”This is about making sure we are as prepared as we can be. Of course, the potential default does present some serious economic risks, so alongside contingency plans it is about making sure we have an economy that is growing and that our public finances are in good order.”
Asked whether the contingency plans covered just British exposure to Greece or the risk of wider contagion, she said:Asked whether the contingency plans covered just British exposure to Greece or the risk of wider contagion, she said:
“You would expect us to have plans in place that look at a range of potential consequences.”“You would expect us to have plans in place that look at a range of potential consequences.”
She said she was not aware of any change in the Foreign Office advice for people travelling to or living in Greece.She said she was not aware of any change in the Foreign Office advice for people travelling to or living in Greece.
Updated at 12.00pm BSTUpdated at 12.00pm BST
11.48am BST11:4811.48am BST11:48
Tsipras: Pensions can't be cut furtherTsipras: Pensions can't be cut further
Heads-up. Greece’s prime minister is criticising the demands made by the country’s creditors, at a press conference with the Austrian chancellor right now.Heads-up. Greece’s prime minister is criticising the demands made by the country’s creditors, at a press conference with the Austrian chancellor right now.
Tsipras: Greek proposals "fully cover" budget needs set out by lenders #Greece pic.twitter.com/oPP8LZyedrTsipras: Greek proposals "fully cover" budget needs set out by lenders #Greece pic.twitter.com/oPP8LZyedr
Tsipras is insisting that Greece’s latest proposals met the creditors demands*. He says he doesn’t understand the ‘obsession’ with finding more pension cuts, on top of the reductions made since austerity began.Tsipras is insisting that Greece’s latest proposals met the creditors demands*. He says he doesn’t understand the ‘obsession’ with finding more pension cuts, on top of the reductions made since austerity began.
Further cuts are not possible, he says.Further cuts are not possible, he says.
Greek PM Tsipras: Greek Proposals Meet Creditor Budget Demands $EURUSDGreek PM Tsipras: Greek Proposals Meet Creditor Budget Demands $EURUSD
* - on that point. Greece did present a plan on Sunday that hit the budget surplus targets demanded by the Institutions (IMF/ECB/EC). However, the Commission was not convinced that the measures were plausible.* - on that point. Greece did present a plan on Sunday that hit the budget surplus targets demanded by the Institutions (IMF/ECB/EC). However, the Commission was not convinced that the measures were plausible.
11.27am BST11:2711.27am BST11:27
UK: Greek default would be serious economic riskUK: Greek default would be serious economic risk
David Cameron’s spokeswoman has just announced that Britain is “stepping up” its preparations in case Greece leaves the eurozone.David Cameron’s spokeswoman has just announced that Britain is “stepping up” its preparations in case Greece leaves the eurozone.
Speaking a few moments ago, she said the UK government believes there would be a “serious economic risk” from a Greek default.Speaking a few moments ago, she said the UK government believes there would be a “serious economic risk” from a Greek default.
This confirms what Nick Watt reported this morning, that the UK is taking “all steps” to protect Britain.This confirms what Nick Watt reported this morning, that the UK is taking “all steps” to protect Britain.
Updated at 11.35am BSTUpdated at 11.35am BST
11.14am BST11:1411.14am BST11:14
The Bank of Greece’s dire warning that the country could crash out of the EU unless it reaches an agreement sent a ripple though the Athens stock market.The Bank of Greece’s dire warning that the country could crash out of the EU unless it reaches an agreement sent a ripple though the Athens stock market.
The AGT index dropped another 5 points, or 1%, to 698 points, having been up in early trading.The AGT index dropped another 5 points, or 1%, to 698 points, having been up in early trading.
That appears to be its lowest level since September 2012That appears to be its lowest level since September 2012
Updated at 11.14am BSTUpdated at 11.14am BST
11.00am BST11:0011.00am BST11:00
EU official: Cyprus shows capital controls can be imposedEU official: Cyprus shows capital controls can be imposed
Brussels reporters have been told that Cyprus’s bailout crisis of spring 2013 shows that capital controls can be imposed in the euro area:Brussels reporters have been told that Cyprus’s bailout crisis of spring 2013 shows that capital controls can be imposed in the euro area:
As you may recall, Cyprus’s banks were shut for several days after its government accepted a €10.7bn eurozone bailout.As you may recall, Cyprus’s banks were shut for several days after its government accepted a €10.7bn eurozone bailout.
Caps were imposed on how much money could be taken out of banks, or out of the country, and savers with over €100,000 in the banks suffered a hefty haircut on their deposits.Caps were imposed on how much money could be taken out of banks, or out of the country, and savers with over €100,000 in the banks suffered a hefty haircut on their deposits.
Updated at 11.13am BSTUpdated at 11.13am BST
10.47am BST10:4710.47am BST10:47
Werner Faymann’s ‘solidarity visit’ to Greece hasn’t gone down terribly well in Brussels:Werner Faymann’s ‘solidarity visit’ to Greece hasn’t gone down terribly well in Brussels:
"I'm not quite sure what the Austrian chancellor is doing in Athens," says senior #EU official. #Greece"I'm not quite sure what the Austrian chancellor is doing in Athens," says senior #EU official. #Greece
10.40am BST10:4010.40am BST10:40
The chancellor of Austria has now arrived at the Greek PM’s residence, Maximos Mansion, for talks with Alexis Tsipras.The chancellor of Austria has now arrived at the Greek PM’s residence, Maximos Mansion, for talks with Alexis Tsipras.
Werner Faymann has already repeated his call for Europe to support Greece, saying:Werner Faymann has already repeated his call for Europe to support Greece, saying:
“For Europe to be stronger, it must show solidarity and support to any country which needs it.”“For Europe to be stronger, it must show solidarity and support to any country which needs it.”
That follows Faymann’s warning this morning that Greece’s creditors are making some unacceptable demands on the country’s people:That follows Faymann’s warning this morning that Greece’s creditors are making some unacceptable demands on the country’s people:
10.39am BST10:3910.39am BST10:39
EU officials are also telling reporters in Brussels that they have already made serious concessions to Greece, since agreeing a four-month bailout extension in February.EU officials are also telling reporters in Brussels that they have already made serious concessions to Greece, since agreeing a four-month bailout extension in February.
That implies they’re not willing to make further compromises to reach a deal.That implies they’re not willing to make further compromises to reach a deal.
Senior #EU Official says the Institutions have moved significantly beyond what was agreed on February 20 #Eurogroup #GreeceSenior #EU Official says the Institutions have moved significantly beyond what was agreed on February 20 #Eurogroup #Greece
"Institutions have moved very, very significantly beyond what was agreed by Feb 20," says sr #EU official. "They are extreme movements.""Institutions have moved very, very significantly beyond what was agreed by Feb 20," says sr #EU official. "They are extreme movements."
10.29am BST10:2910.29am BST10:29
EU doesn't expect breakthrough tomorrowEU doesn't expect breakthrough tomorrow
The head of the eurozone’s finance ministers has declared that there is still time for an agreement to be reached, to avert the alarming scenario painted by Bank of Greece today.The head of the eurozone’s finance ministers has declared that there is still time for an agreement to be reached, to avert the alarming scenario painted by Bank of Greece today.
Jeroen Dijsselbloem told reporters at the Dutch parliament that:Jeroen Dijsselbloem told reporters at the Dutch parliament that:
“Time is running out but a deal is still possible”.“Time is running out but a deal is still possible”.
Dijsselbloem will chair tomorrow’s Eurogroup meeting, where finance chiefs from across the single currency bloc will discuss the crisis.Dijsselbloem will chair tomorrow’s Eurogroup meeting, where finance chiefs from across the single currency bloc will discuss the crisis.
The Brussels press pack are being briefed now, and hearing that the discussion on Greece could be rather brief.The Brussels press pack are being briefed now, and hearing that the discussion on Greece could be rather brief.
Senior #EU official adds to growing feeling nothing on #Greece will be agreed at Thurs #Eurogroup: "I believe this will be pretty short."Senior #EU official adds to growing feeling nothing on #Greece will be agreed at Thurs #Eurogroup: "I believe this will be pretty short."
Eurogroup looks unpromising/promising depending on your perspective: 'I honestly belive this will be pretty short,' says EU official #greeceEurogroup looks unpromising/promising depending on your perspective: 'I honestly belive this will be pretty short,' says EU official #greece
Updated at 10.44am BSTUpdated at 10.44am BST
10.05am BST10:0510.05am BST10:05
Greek Central Bank pleads for deal to avoid GrexitGreek Central Bank pleads for deal to avoid Grexit
Greece’s central bank has issued an urgent plea to both sides to hammer out a deal, warning that the country could be forced out of the European Union.Greece’s central bank has issued an urgent plea to both sides to hammer out a deal, warning that the country could be forced out of the European Union.
In a new report to the Greek parliament, the Bank of Greece said an agreement was now a “historic imperative”. Otherwise, the country risks being relegated to just “a poor country in the European South”.In a new report to the Greek parliament, the Bank of Greece said an agreement was now a “historic imperative”. Otherwise, the country risks being relegated to just “a poor country in the European South”.
It’s a chilling warning of the risks that Greece currently faces.It’s a chilling warning of the risks that Greece currently faces.
The Bank says:The Bank says:
Failure to reach an agreement would....mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and – most likely – from the European Union.Failure to reach an agreement would....mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and – most likely – from the European Union.
A manageable debt crisis, as the one that we are currently addressing with the help of our partners, would snowball into an uncontrollable crisis, with great risks for the banking system and financial stability. An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring.A manageable debt crisis, as the one that we are currently addressing with the help of our partners, would snowball into an uncontrollable crisis, with great risks for the banking system and financial stability. An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring.
And the impact on the Greek people would be desperately severe:And the impact on the Greek people would be desperately severe:
All this would imply deep recession, a dramatic decline in income levels, an exponential rise in unemployment and a collapse of all that the Greek economy has achieved over the years of its EU, and especially its euro area, membership.All this would imply deep recession, a dramatic decline in income levels, an exponential rise in unemployment and a collapse of all that the Greek economy has achieved over the years of its EU, and especially its euro area, membership.
From its position as a core member of Europe, Greece would see itself relegated to the rank of a poor country in the European South.From its position as a core member of Europe, Greece would see itself relegated to the rank of a poor country in the European South.
For that reason, the Bank said, the risk of a “credit event” (ie, a default), must be removed “once and for all”.For that reason, the Bank said, the risk of a “credit event” (ie, a default), must be removed “once and for all”.
It also reported that around €30bn has already left Greek bank accounts since October, as the “dragging-on of negotiations” hit confidence.It also reported that around €30bn has already left Greek bank accounts since October, as the “dragging-on of negotiations” hit confidence.
That has:That has:
...largely taken the form of cash withdrawals and hoarding, while flight of capital has also been recorded....largely taken the form of cash withdrawals and hoarding, while flight of capital has also been recorded.
#Greece | Deposits down to '04 levels...Comical Ali says still no bank runs here pic.twitter.com/IXl2y3bHDy#Greece | Deposits down to '04 levels...Comical Ali says still no bank runs here pic.twitter.com/IXl2y3bHDy
And if all that wasn’t bad enough, the Bank also predicted that the current recession will probably get even worse:And if all that wasn’t bad enough, the Bank also predicted that the current recession will probably get even worse:
The deterioration of economic sentiment indicators and financing conditions in the private sector suggest that the slowdown of the economy is likely to accelerate in the second quarter of 2015, putting the economy at risk for a renewed bout of recession.The deterioration of economic sentiment indicators and financing conditions in the private sector suggest that the slowdown of the economy is likely to accelerate in the second quarter of 2015, putting the economy at risk for a renewed bout of recession.
9.40am BST09:409.40am BST09:40
UK launches contingency planning for GrexitUK launches contingency planning for Grexit
The British government has embarked on contingency planning to prepare for the “serious economic risks” posed by a Greek default and a possible exit from the euro, the chancellor, George Osborne, has confirmed.The British government has embarked on contingency planning to prepare for the “serious economic risks” posed by a Greek default and a possible exit from the euro, the chancellor, George Osborne, has confirmed.
My colleague Nick Watt reports:My colleague Nick Watt reports:
As David Cameron prepares to discuss the Greek crisis with the prime ministers of Italy and Luxembourg on Wednesday, the chancellor said the UK government was taking “all steps” to protect Britain.As David Cameron prepares to discuss the Greek crisis with the prime ministers of Italy and Luxembourg on Wednesday, the chancellor said the UK government was taking “all steps” to protect Britain.
Whitehall officials, who held contingency planning meetings on the implications of a possible Greek exit from the euro in February, have stepped up their preparations in recent weeks amid fears that Greece could be on the verge of a debt default...Whitehall officials, who held contingency planning meetings on the implications of a possible Greek exit from the euro in February, have stepped up their preparations in recent weeks amid fears that Greece could be on the verge of a debt default...
Full story:Full story:
Related: UK starts planning for 'serious economic risks' of Greek exit from euroRelated: UK starts planning for 'serious economic risks' of Greek exit from euro
9.35am BST09:359.35am BST09:35
My colleague Jon Henley is in Athens, and found plenty of evidence that Greeks have been stashing funds away in case their banking sector collapses:My colleague Jon Henley is in Athens, and found plenty of evidence that Greeks have been stashing funds away in case their banking sector collapses:
He writes:He writes:
“Everybody’s doing it,” said Joanna Christofosaki, in front of a Eurobank cash dispenser in the leafy Athens neighbourhood of Kolonaki.“Everybody’s doing it,” said Joanna Christofosaki, in front of a Eurobank cash dispenser in the leafy Athens neighbourhood of Kolonaki.
“Our friends have all done it. Nobody wants their money to be worthless tomorrow. Nobody wants to be unable to get at it.”“Our friends have all done it. Nobody wants their money to be worthless tomorrow. Nobody wants to be unable to get at it.”
A researcher in the archaeology department at the Academy of Athens, Christofosaki said she knew plenty of people who had “€10,000 somewhere at home” and plenty of others who chose to keep their stash at the office. Was she among them?A researcher in the archaeology department at the Academy of Athens, Christofosaki said she knew plenty of people who had “€10,000 somewhere at home” and plenty of others who chose to keep their stash at the office. Was she among them?
“If I was, I certainly wouldn’t tell you.”“If I was, I certainly wouldn’t tell you.”
“People are very concerned,” said the owner of a small company who asked not to be named.“People are very concerned,” said the owner of a small company who asked not to be named.
“I think those who could, have already transferred some money abroad. And lots of others have taken out a few thousand, enough to see them through any immediate crisis. I have.”“I think those who could, have already transferred some money abroad. And lots of others have taken out a few thousand, enough to see them through any immediate crisis. I have.”
Sofia, who runs a boutique in one of Athens’ wealthier suburbs, said she and her husband had €15,000 in a safe in the garage, “just to be sure we’re not caught out.”Sofia, who runs a boutique in one of Athens’ wealthier suburbs, said she and her husband had €15,000 in a safe in the garage, “just to be sure we’re not caught out.”
Elsewhere, an anonymous car concessionaire confessed to “getting into gold a little bit”.Elsewhere, an anonymous car concessionaire confessed to “getting into gold a little bit”.
“Not much. But it’s safe, isn’t it? That’s what they say.”“Not much. But it’s safe, isn’t it? That’s what they say.”
Here’s Jon’s full report:Here’s Jon’s full report:
Related: 'It’s going to be bad, whatever happens': Greece on edge as eurozone exit loomsRelated: 'It’s going to be bad, whatever happens': Greece on edge as eurozone exit looms
Updated at 9.36am BSTUpdated at 9.36am BST
9.29am BST09:299.29am BST09:29
Austria’s finance minister Hans Jörg Schelling may not be as supportive towards Greece as chancellor Faymann, suggests our Europe editor Ian Traynor.Austria’s finance minister Hans Jörg Schelling may not be as supportive towards Greece as chancellor Faymann, suggests our Europe editor Ian Traynor.
#grexit doubt whether #schelling will echo #faymann in lux tomorrow#grexit doubt whether #schelling will echo #faymann in lux tomorrow
Two months ago, Schelling said he was “somewhat irritated” by Greece’s failure to submit acceptable reforms. He could be positively exasperated by now.Two months ago, Schelling said he was “somewhat irritated” by Greece’s failure to submit acceptable reforms. He could be positively exasperated by now.
9.18am BST09:189.18am BST09:18
Freelance journalist Omaira Gill reports that the Greek people are feeling increasingly worried by the crisis:Freelance journalist Omaira Gill reports that the Greek people are feeling increasingly worried by the crisis:
Mood on the ground: public is spooked. #troika #greece #austerity #euro #eurocrisis #syrizaMood on the ground: public is spooked. #troika #greece #austerity #euro #eurocrisis #syriza
9.09am BST09:099.09am BST09:09
Over in Athens, demonstrators have occupied the offices of the European Commission in an anti-austerity protest.Over in Athens, demonstrators have occupied the offices of the European Commission in an anti-austerity protest.
Enikos has more details:Enikos has more details:
The demonstrators are members of the trade union affiliated to Syriza, called META.The demonstrators are members of the trade union affiliated to Syriza, called META.
They have raised a banner saying: “The people cannot be blackmailed – The country isn’t for sale”.They have raised a banner saying: “The people cannot be blackmailed – The country isn’t for sale”.
8.38am BST08:388.38am BST08:38
Europe should be able to handle the “contagion risk” if Greece were to default on its debts and crash out of the eurozone.Europe should be able to handle the “contagion risk” if Greece were to default on its debts and crash out of the eurozone.
That’s according to Moritz Kraemer, managing director of sovereign ratings at S&P.That’s according to Moritz Kraemer, managing director of sovereign ratings at S&P.
Speaking on Bloomberg TV this morning, Kraemer said that most investors don’t think that “Grexit” is a likely scenario. But, if they are wrong, Greece is relatively well insulated from the rest of the financial world:Speaking on Bloomberg TV this morning, Kraemer said that most investors don’t think that “Grexit” is a likely scenario. But, if they are wrong, Greece is relatively well insulated from the rest of the financial world:
If you really look at the contagion risks - the direct links through common creditors, it’s not really that important any more.If you really look at the contagion risks - the direct links through common creditors, it’s not really that important any more.
Europe also has “much more powerful firewalls” than in 2012 - including a new bailout facility (the ESM) and Mario Draghi’s new bond-buying vehicle (OMT).Europe also has “much more powerful firewalls” than in 2012 - including a new bailout facility (the ESM) and Mario Draghi’s new bond-buying vehicle (OMT).
There is really a much bigger, more powerful toolbox than last time.There is really a much bigger, more powerful toolbox than last time.
That’s all true....but it’s worth noting that eurozone government bond yields (or interest rates) have been rising in recent weeks. That suggests they are being seen as riskier....That’s all true....but it’s worth noting that eurozone government bond yields (or interest rates) have been rising in recent weeks. That suggests they are being seen as riskier....
S&P's Kraemer says Greek contagion manageable in default case b/c of fire walls and ECB QE. (BBG) pic.twitter.com/pAlhONjMhYS&P's Kraemer says Greek contagion manageable in default case b/c of fire walls and ECB QE. (BBG) pic.twitter.com/pAlhONjMhY
Kraemer also confirmed that Greece would not be in default if missed its €1.6bn repayment to the IMF on 30 June.Kraemer also confirmed that Greece would not be in default if missed its €1.6bn repayment to the IMF on 30 June.
8.19am BST08:198.19am BST08:19
Here’s a couple more key quotes from the Austrian chancellor this morning, ahead of his meeting with Alexis Tsipras at noon local time (10am BST):Here’s a couple more key quotes from the Austrian chancellor this morning, ahead of his meeting with Alexis Tsipras at noon local time (10am BST):
#Austria Chancellor Faymann: Institutions must help #Greece deal with poverty; #EU will show solidarity if Greece does homework#Austria Chancellor Faymann: Institutions must help #Greece deal with poverty; #EU will show solidarity if Greece does homework
#Austria Chancellor Faymann: Some proposals for #Greece were 'not Ok'; Greece must improve tax collection, rule of law#Austria Chancellor Faymann: Some proposals for #Greece were 'not Ok'; Greece must improve tax collection, rule of law
8.15am BST08:158.15am BST08:15
Europe’s stock markets are creeping higher this morning, as traders watch events in Greece nervously.Europe’s stock markets are creeping higher this morning, as traders watch events in Greece nervously.
The FTSE 100 has gained 20 points, or 0.3%, in the first few minutes of trading, having been driven to a four-month low earlier this week.The FTSE 100 has gained 20 points, or 0.3%, in the first few minutes of trading, having been driven to a four-month low earlier this week.
The German and Spanish markets are also up just 0.2%, while the euro is a little higher against the US dollar at $1.127.The German and Spanish markets are also up just 0.2%, while the euro is a little higher against the US dollar at $1.127.
So, no panic. But the Greek saga is still hitting sentiment in the City.So, no panic. But the Greek saga is still hitting sentiment in the City.
As Mike van Dulken of Accendo Markets puts it:As Mike van Dulken of Accendo Markets puts it:
The nation’s fate is perilously in the balance as failure by Greece and its Creditors to cede ground continues, and a mud-slinging blame game by all and sundry for the lack of progress gathers pace. The clock ticks ever closer to default.The nation’s fate is perilously in the balance as failure by Greece and its Creditors to cede ground continues, and a mud-slinging blame game by all and sundry for the lack of progress gathers pace. The clock ticks ever closer to default.
8.05am BST08:058.05am BST08:05
Austrian chancellor: I stand by the Greek peopleAustrian chancellor: I stand by the Greek people
The Austrian Chancellor has issued a strong declaration of solidarity with Greece, hours before meeting Greek prime minister Alexis Tsipras in Athens later today.The Austrian Chancellor has issued a strong declaration of solidarity with Greece, hours before meeting Greek prime minister Alexis Tsipras in Athens later today.
Werner Faymann told Austrian broadcaster ORF that Greece should be given more support, given the extent of the damage suffered by its people since the debt crisis began.Werner Faymann told Austrian broadcaster ORF that Greece should be given more support, given the extent of the damage suffered by its people since the debt crisis began.
Faymann criticised some of the measures which Greece’s lenders - the IMF, ECB and EC - are demanding, saying:Faymann criticised some of the measures which Greece’s lenders - the IMF, ECB and EC - are demanding, saying:
“I know there were a number of proposals, also from the institutions, that I also don’t find in order.”“I know there were a number of proposals, also from the institutions, that I also don’t find in order.”
“High joblessness, 30-40 percent (with) no health insurance and then raising VAT on medicines. People in this difficult situation cannot understand that.”“High joblessness, 30-40 percent (with) no health insurance and then raising VAT on medicines. People in this difficult situation cannot understand that.”
Relations between Greece and her creditors are increasingly fraught, as Athens resists pressure to cut its pensions bill by 1% of GDP, and to raise sales taxes.Relations between Greece and her creditors are increasingly fraught, as Athens resists pressure to cut its pensions bill by 1% of GDP, and to raise sales taxes.
Last night, EC president Jean-Claude Juncker accused the Greek government of misleading the public over exactly what is being demanded.Last night, EC president Jean-Claude Juncker accused the Greek government of misleading the public over exactly what is being demanded.
Faymann’s intervention, and his visit to Greece today, are a last-ditch attempt to end the standoff with international creditors before eurozone finance ministers meet tomorrow.Faymann’s intervention, and his visit to Greece today, are a last-ditch attempt to end the standoff with international creditors before eurozone finance ministers meet tomorrow.
He declared:He declared:
“I stand on the side of the Greek people who in this difficult position are being proposed more things detrimental to society.”“I stand on the side of the Greek people who in this difficult position are being proposed more things detrimental to society.”
Faymann did also emphasise that Greece must meet its commitments under its current bailout plan, citing the need to fight fraud and a fair taxation system where everyone pays their fair share.Faymann did also emphasise that Greece must meet its commitments under its current bailout plan, citing the need to fight fraud and a fair taxation system where everyone pays their fair share.
But the priority is to “avoid a catastrophe”.But the priority is to “avoid a catastrophe”.
And asked whether Greece’s leaders can deliver a compromise in time, he said:And asked whether Greece’s leaders can deliver a compromise in time, he said:
“I assume that someone who is elected lives up to his responsibility.”“I assume that someone who is elected lives up to his responsibility.”
(thanks to Reuters for the quotes)(thanks to Reuters for the quotes)
Updated at 8.07am BSTUpdated at 8.07am BST
7.54am BST07:547.54am BST07:54
Introduction: Will ECB continue supporting Greek banks?Introduction: Will ECB continue supporting Greek banks?
Good morning, and welcome to our rolling coverage of the Greek bailout crisis.Good morning, and welcome to our rolling coverage of the Greek bailout crisis.
Athens now has just 13 days to reach a deal with its creditors before its bailout programme expires, and a matter of hours until finance ministers meet to discuss the situation in Luxembourg on Thursday.Athens now has just 13 days to reach a deal with its creditors before its bailout programme expires, and a matter of hours until finance ministers meet to discuss the situation in Luxembourg on Thursday.
The prospects of a deal to end the deadlock that is spreading worry through the eurozone and beyond do not look great.The prospects of a deal to end the deadlock that is spreading worry through the eurozone and beyond do not look great.
With both sides deadlocked, Austrian chancellor Werner Faymann is heading to Athens this morning for talks with prime minister Alexis Tsipras at noon local time, followed by statements to the press.With both sides deadlocked, Austrian chancellor Werner Faymann is heading to Athens this morning for talks with prime minister Alexis Tsipras at noon local time, followed by statements to the press.
Faymann will be pushing Tsipras to reach a deal, to head off the growing risks that Greece fails to repay €1.6bn to the IMF on 30 June.Faymann will be pushing Tsipras to reach a deal, to head off the growing risks that Greece fails to repay €1.6bn to the IMF on 30 June.
That danger prompted US Treasury secretary Jack Lew to phone Tsipras last night and push for a “pragmatic compromise”, just hours after the Greek PM accused the IMF of “criminal responsibility” for the crisis.That danger prompted US Treasury secretary Jack Lew to phone Tsipras last night and push for a “pragmatic compromise”, just hours after the Greek PM accused the IMF of “criminal responsibility” for the crisis.
Guardian front page, Wednesday 17 June 2015: Greece accuses 'criminal' creditors as default nears pic.twitter.com/kvxJC9VrCUGuardian front page, Wednesday 17 June 2015: Greece accuses 'criminal' creditors as default nears pic.twitter.com/kvxJC9VrCU
The unfolding crisis piles more pressure on the European Central Bank, which must decide today whether to keep providing emergency liquidity to the Greek banking sector.The unfolding crisis piles more pressure on the European Central Bank, which must decide today whether to keep providing emergency liquidity to the Greek banking sector.
The ECB has already stumped up around €82bn of support, to help banks keep afloat despite the steady loss of deposits as alarmed savers withdraw their funds.The ECB has already stumped up around €82bn of support, to help banks keep afloat despite the steady loss of deposits as alarmed savers withdraw their funds.
The ECB is unlikely to pull the plug on ELA today; such a move would be far too political for the central bank at this stage in the crisis. It could agree to raise it by a few billion euros -- a big increase would suggest that the outflow of deposits has accelerated.The ECB is unlikely to pull the plug on ELA today; such a move would be far too political for the central bank at this stage in the crisis. It could agree to raise it by a few billion euros -- a big increase would suggest that the outflow of deposits has accelerated.
We’ll be watching out for comments from Greek finance minister Yanis Varoufakis, who is meeting the Secretary-General of the OECD, Angel Gurria, in Paris this afternoon.We’ll be watching out for comments from Greek finance minister Yanis Varoufakis, who is meeting the Secretary-General of the OECD, Angel Gurria, in Paris this afternoon.
Varoufakis to meet OECD's Gurria in Paris - http://t.co/H0TRU0es3q pic.twitter.com/wOk4SsZo0MVaroufakis to meet OECD's Gurria in Paris - http://t.co/H0TRU0es3q pic.twitter.com/wOk4SsZo0M
And two of most powerful figures in world finance, IMF chief Christine Lagarde and Federal Reserve chair Janet Yellen, will both be speaking tonight; might they say something about the Greek crisis?And two of most powerful figures in world finance, IMF chief Christine Lagarde and Federal Reserve chair Janet Yellen, will both be speaking tonight; might they say something about the Greek crisis?
Morning Note: 1. ECB ELA decision. 2. Lagarde speaks 7:30 UK time. 3. Yellen speaks 7:30 UK time = bad scheduling pic.twitter.com/7wWexgtrvpMorning Note: 1. ECB ELA decision. 2. Lagarde speaks 7:30 UK time. 3. Yellen speaks 7:30 UK time = bad scheduling pic.twitter.com/7wWexgtrvp
I’ll be tracking all the main events through the day....I’ll be tracking all the main events through the day....