martes, 7 de julio de 2015

IT IS NOT OBSESSION IT IS THAT NOW THERE IS NOT ANYTHING THAT IT WORRIES MORE



I have not been happened another title for this tomorrow's article I possibly regret it more than you, but there is not another solution that to continue writing on the same problem until some day he ends, I don't wait (you will understand) that my comments serve so that somebody takes them as solution to the problem but I guarantee them that when this I come out to the light he opens it written I no longer have the smallest doubt. 

Yesterday he wrote on what should make the Greek economy to leave urgently the more ones the total stagnation to me to understand and in my opinion it proposed the setting in march of the drachma to put it in circulation with the purpose of being able to supply to the banks and these to the daily economy of civic trade and companies of the country he said that this drachma should be supported by the Euro and with a value of alone indexed change to the European foreign currency. This would solve the lack of effective in the Greek economy and it would save the face to the European partners and of the euro group when not having to already supply from so many Eurus to those indebted Greek economic structures. 

Because we all speak of the Greek economy but we don't speak in detail and there is one that is fundamental to solve the operative one and viability of the Greek banks. The answer to the problems of the Greek banks is simple: A stable Government, a believable economic plan and the perspective of an economic recovery. The firm one "not" in the Greek referendum he can that he has given them the first one, but the other ones two they are more far that never.  

The markets reflected the result this Monday; at the last moment of the morning the Stoxx Europe 600 fell less than 1%, with damage for the Italian and Portuguese banks, and the yield of the public funds of the south of Europe had ascended modestly. Nevertheless, the voting increases the possibilities of an exit of Greece: the freezing of the bank system of the country runs the risk of sinking the Greek economy. The Greek banks are staying without effective. They arrived finally of week they are single 1.000 million available Eurus for the depositors, according to the national bank association. Depending on the rhythm of the retreats of money, they have one day or two as a lot.  

It is probable that the European Central Bank grants more emergency funds now that the financial rescue of Greece has concluded. But this will make it with great caution and without many boasts of generosity. This left to the banks in a critical situation and while their liquidity is frozen, the engagements of the economy screech and the economic activity doesn't work and it also avoids insofar as possible to the banks. A useless system of payments could take to the tourists to cancel its vacations, cutting the main source of revenues of Greece.  

Before the referendum, there were rumors that you could appeal to a part of the remaining deposits to help to recapitalize the banking. He can that some of these rumors were spread with the purpose of scaring the voters. Nevertheless, the certain thing is that the more this economic, more probable limbo lasts it is that the banks will have to be rescued, partly with the funds of the depositors like it happened in Cyprus. So they won't become new deposits and the debts will be pending.  

This means that the high volume of irretrievable loans, equivalent to between 32% and 39% of the internal debt of the four main banks at the end of the first trimester, it will only increase. The same as the economic crisis that has arisen since the referendum was announced it means that Greece needs an even bigger rescue, it is also probable that the capital necessities increase. Citigroup estimates that the four banks could require 10.000 million Eurus of new capital easily if this situation continues maybe much more here it is where the new Drachma would enter this liquidity perfectly it could be made with own money without having to increase the consumption of Eurus because they remember that then these Eurus are to pay them and as always I say it is euro according to for who is very expensive.  

The true question for the BCE is in what moment he/she can stop to judge that the Greek banks are solvent. Then he would have to cut the financing. The most probable thing is that this happens as very late July 20, when the term of Greece finishes to pay the public debt in the balance of the own BCE: the unpaid one would mine the collateral one that the banks have promised to obtain the financing and it would imply losses on the assets of the banks. But it is that without a true progress toward a new agreement with Greece in next days, the implications of the solvency of the banks could leave the BCE without another option more than to cut the line much before.  

That practically would mean a total nationalization of the banks like part of the exit of Greece of the euro zona. The shareholders will disappear, there will be losses for the bondholders and the remaining depositors won't leave better stopped.  

The banks need the Government to agree a new rescue soon. Nevertheless, Greece is caught in its own vicious circle: without a bank system that works, any agreement rises in price every day that is prolonged this situation, stiller moving away it. I insist all this it is very well but it requires time and a lot of work and while what one cannot make is that Greece doesn't work in the most basic thing, the internal economy, this you can solve I insist with the Drachma   

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