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Trembling & Knock-Kneed In Athens

Greek PM Alexis Tsipiras steers the ship of state through the waters of March 2015. (IMG: 

by Preston Clive

It was most emphatically NOT a good Wednesday in Greece yesterday folks. As you may or may not have already heard, yesterday saw the largest stampede of public money out of Greek banks since February's dog days. 

If you happen to be Greek--or you are acquainted with someone who happens to be Greek--and you really really need access to all of your money, I would seriously advise that you hearken to my words and you Get That Money Out Of The Bank Now And I Mean Like RIGHT NOW .  .  .  as in I M M E D I A T E L Y!

The situation is deteriorating so profoundly that It's looking like capital controls are going to be activated very soon--as in like (looks at watch) any second now. This will pinch off access and negate the possibility--for the time being anyhow--of capital outflows on the scale of yesterday repeating themselves until the situation is clarified.

Alexis Tsipiras is treading water, just barely, and is a mere huff and a puff away from sinking into an involuntary Grexit, whether he and his country likes it/wants it or not. The outflow yesterday of €300 million isn't so much a terror inducing number in terms of its size alone, but rather owing to its constituting a harbinger of a sustained outflow at this level over a prolonged period--something that this shambles of an economy cannot withstand. 

Today the Kathimerini newspaper reported that Athens has been pushing the state's utilities to lend them some cash so that the government may avoid running out of cash. What it would desperately like to do is secure permission from EU to issue more bonds to raise cash; at the same time it's looking to secure the remaining bailout cash from it's creditors hammered out by agreement .  .  .  meantime the Troika is seeing a client state, floundering in the water, long on loudly yelled requests and mute on reform details--reforms that were pledged in Brussels during the hi-perspiration round of meetings at the end of last month. 

With Athens so close to running out of money that it is noodling around state pension funds, Tsipiras has requested a meeting with his counterparts in Germany and France as well as EU administration to navigate the churning danger threatening to undo him. According to a report just filed by Reuters,

Prime Minister Alexis Tsipras has requested a meeting with the leaders of Germany, France and the main EU institutions on the sidelines of a European Union summit to press for Athens to receive short-term funds to keep itself afloat.

"I will repeat to him what I’ve already told him twice: Greece must undertake the necessary reforms, Greece must ensure that the commitments it made to the Eurogroup in 2012 and more recently are followed up on," European Commission President Jean-Claude Juncker told France's Europe 1 radio.

German Chancellor Angela Merkel delivered the same message in a speech to parliament ahead of the late-night Brussels talks and a crucial visit by Tsipras to Berlin next Monday, saying the crisis could only be overcome if Greece stuck to agreements.

For their part the ECB dropped an additional €400 mil on the limits to raise the cash assistance to the Greeks by that amount, bringing it up to €69.8B. But the amount of money needed by the Greeks is tremendous--what is irking their creditors in the Union is the simple fact that in the approximate month that has gone by since the Brussels Madness, there hasn't been any forward legislation in Athens to enact any of the promised reforms that landed them the money in the first place. 

More from Reuters:

European Parliament President Schulz said Greece's financial situation was "dangerous" and it needed 2-3 billion euros in the short term to avoid bankruptcy. "Time is short," he told German radio. "So it would be good if Greece fulfils the obligations that it has agreed to -- then further money will flow."

Greece has asked to receive some 1.9 billion euros in ECB profits on Greek bond holdings, which finance ministers have linked to progress in implementing the program. It also wants ECB permission to issue more short-term treasury bills, which only Greek banks are willing to buy.


Athens has made no move in the month since the Brussels agreement to bring forward legislation to meet its commitments under the bailout agreement.

The chairman of the Eurogroup of finance ministers, Jeroen Dijsselbloem of the Netherlands, hinted this week that Greece might have to introduce capital controls restricting cash withdrawals, as Cyprus had done, if financial stress got worse.

German Finance Minister Wolfgang Schaeuble has warned that the risk of an accidental Greek exit from the euro zone is rising, while insisting that Berlin wants to avoid that.

As I said earlier--if you want your money, if you need your money .  .  .  GET IT OUT OF THERE PRONTISSIMO.

Preston Clive