The stalemate greek sinks European stock exchanges, thud of the Milan Stock … – The Messenger

The European Central Bank puts his hands forward sull’Ela, launching a warning to Athens that does not lend itself to misunderstandings.

“The goal of the emergency liquidity (Ela) is to support solvent banks that are facing temporary liquidity problems,” the ECB said in a report on its financial risk management, explaining that “Ela faces liquidity problems in the short term and is not intended to provide support to the solvency” of the banks. “It is not a tool of monetary policy,” emphasizes the central institution that also mentions the concern about risks of “moral hazard” on the day that are distributed in hard negotiations between Greece and international creditors.

Eurogroup today it became clear how the negotiations rests on fragile assumptions and market nervousness was felt with European stocks finished in the red again. After a positive start that left foreshadow an attempt to rebound, the indices have turned downward once clear that Athens had no new proposals presented to the meeting on which at least try to strike a new deal.

suffer the most was that the Milan Stock Exchange closed touching fell by 3% (-2.97%). Heavy even Paris (-2.2%), Frankfurt (-1.96%) and London (-1.5%). It goes down even the euro slipped to its lowest for five weeks up to $ 1.0916, while the spread between BTP and Bund remains stable at 162 basis points. It is in this climate that is part of the warning of the ECB in Athens: in the report, it is stated that the emergency liquidity guaranteed from ELA should not create “a clear concern about a possible violation of the prohibition of monetary financing,” does not even ” increase the risks “of a” moral hazard “with its delivery on terms” too generous. ” Indeed, there is the fear that a ‘favorable treatment granted to Greece today will pave the way in the future to less responsible behavior by other countries in trouble and could then claim the same conditions.

the ECB, the Ela could also constitute ‘State aid if it is fully secured by collateral to which they apply appropriate discounts (haircuts) based on its quality and market value “and it is also associated with” risk Legal. “

So, after the clear victory of the” no “in the referendum greek, Frankfurt has blocked the line of credit Ela – provided to Greek banks through the Bank of Greece – to 89 billion euro rejecting the request for an increase made by Athens and has also increased the collateral, ie guarantees that the lenders must bring Greek all’Eurotower to receive loan money.

The ECB will be forced to close, however, the Ela tap if July 20 Greece will not reimburse 3.5 billion euro of maturing securities. “It would be a bankruptcy, a default – said the Austrian member of the Executive Board, Ewald Nowotny – in this situation it would not be possible for the ECB to provide additional liquidity.”