Greece Debt Crisis - Après Oxi

Maria Joao Rodrigues (Portuguese Socialist) starts by presenting her position as supporting Greece's place in Euro with a fair deal for Greece.

Asks what is a 'fair deal'.

Can we reconcile the Euro with democracy?

Tsipras, you are coming with a strong mandate from your country. But other ministers can also argue are coming with a strong democratic mandate. We need to find a way to compromise. A real European compromise.

My question for you, and also the European parliament, can we accept a fair deal for Greece including debt discussions in return for substantial reforms, a fair tax system...?

Notis Marias (Greek Conservative) suggests we should tell Merkel to pay off the world war reparations first.

Akrasia

The way this is playing out is very bizzare

All the E.U. finance ministers are complaining that Greece have no proposals

Greece have a very obvious proposal. They want a write off of Greek debt and an end to the anti growth austerity that has seen Greek GDP collapse, or else they will pull out of the euro and default on all the ECB debt.

While the E.U. berate the Greeks for not bringing any proposals to the table, it's the ECB that have no plan for Greece to emerge from their economic crisis. Further tax increases and cuts to government spending will deflate the Greek economy even further. The ECB 'plan' is demonstably not working for Greece.

The IMF agree with Greece that the debt is unsustainable. The ECB are the fringe extremists who are trying to bully everyone else and they can not justify their own policies with reference to any coherent economic theory.

Sylvie Goulard (French Liberal) welcomes Tsipras.

I have 3 proposals.
1 - Modify our method. To date all has been done behind closed doors. There's only 1 euro, not a euro of the greeks of the french etc, so there's only one democracy. We need to stop the nonsense of comparison.
2 - Lets be more open and visible.
3 - As they say in the states - just do it. You made plenty of correct points about tax reforms etc but implement it! Do it!

The Greek people said no, but What are you really willing to say Yes to?

Are you willing to accept that the ECB is for all of Europe, not for just Greek.

We could discuss reparations if you wish, it was the Americans that got us to give up the ghost there. Let's not shake the skeletons of the past.

marmurr1916

Deleted User wrote: »

Marine le Pen states "Austerity and the Euro are Siamese twins" and cites Krugman whilst encouraging Greece to leave the euro.

A supposed left-winger whose chief supporters in the EP so far have been Nigel Farage and Marine Le Pen?

As I've said elsewhere, Syriza is not a left-wing party - it's a party of xenophobic nationalists.

And that's why the likes of Farage and Le Pen are fans.

Akrasia

Akrasia wrote: »

The way this is playing out is very bizzare

All the E.U. finance ministers are complaining that Greece have no proposals

Greece have a very obvious proposal. They want a write off of Greek debt and an end to the anti growth austerity that has seen Greek GDP collapse, or else they will pull out of the euro and default on all the ECB debt.

While the E.U. berate the Greeks for not bringing any proposals to the table, it's the ECB that have no plan for Greece to emerge from their economic crisis. Further tax increases and cuts to government spending will deflate the Greek economy even further. The ECB 'plan' is demonstably not working for Greece.

Not a single concrete reform proposal. Tsipras talks about tax reform, anti-corruption and counter acting clientelism in the abstract, that's not enough. Substance is required over soundbites.

Akrasia wrote: »

The IMF agree with Greece that the debt is unsustainable. The ECB are the fringe extremists who are trying to bully everyone else and they can not justify their own policies with reference to any coherent economic theory.

The debt was sustainable in December, and is now unsustainable. What has changed?

Bob24

Akrasia wrote: »

The way this is playing out is very bizzare

All the E.U. finance ministers are complaining that Greece have no proposals

Greece have a very obvious proposal. They want a write off of Greek debt and an end to the anti growth austerity that has seen Greek GDP collapse, or else they will pull out of the euro and default on all the ECB debt.

While the E.U. berate the Greeks for not bringing any proposals to the table, it's the ECB that have no plan for Greece to emerge from their economic crisis. Further tax increases and cuts to government spending will deflate the Greek economy even further. The ECB 'plan' is demonstably not working for Greece.

The IMF agree with Greece that the debt is unsustainable. The ECB are the fringe extremists who are trying to bully everyone else and they can not justify their own policies with reference to any coherent economic theory.

Regardless of what they would like, it is just a hard fact that Greece showed-up with no written proposal yesterday, not sure how you can deny that ...

The ECB's mandate is around monetary stability, noone is expecting it to come up with a plan for the Greek economy (this is the job of the Greek leadership, the EZ's finance ministers, and to some extend the IMF).

Lastly, if Greece wants to follow the proposals of the IMF they could have mentioned that earlier - but we all know aside from the ones they have cherry-picked they don't are not interested in what the IMF is saying (which is much more demanding than what the EU is asking for and is why Syriza has regularly asked for the IMF to be excluded from a potential 3rd bailout plan).

Matteo Salvini (Italian Nationalist) thanks Tsipras for standing up against the Euro

Permabear

This post has been deleted.

Janusz Korwin-Mikke (Polish Independent) calls for a military coup in the style of Pinochet and the destruction of the European Union.

marmurr1916

Deleted User wrote: »

Not a single concrete reform proposal. Tsipras talks about tax reform, anti-corruption and counter acting clientelism in the abstract, that's not enough. Substance is required over soundbites.

It would have been helpful if he had given the European Parliament a list of reforms that the current Greek government had implemented in these areas since January.

Surely tax reform, anti-corruption measures and measures to counteract clientelism can be taken by the Greek government on its own initiative?

These are desirable goals to achieve in and of themselves even if Greece had a smoothly running economy.

According to many reports, Syriza has failed completely on the clientelism front, with a number of high profile supporters of Syriza being appointed to juicy public sector jobs, along with relatives of Syriza's leadership being appointed - e.g. Tsipras' cousin now has a job with Greece's foreign ministry.

And then there's the Syriza Speaker of Greece's parliament who simply shrugged off the fact that her mother had claimed child benefit for her up until two years ago, when she turned 37.

Syriza has also largely ignored Swiss offers to co-operate with Greece over bank accounts held by Greek citizens in Switzerland.

Based on what it has actually done since taking office, Syriza has proven to be little different to New Democracy or PASOK:

Ryan Heath ‏@PoliticoRyan 2 hrs2 hours ago

SLAM: Verhofstadt says #Syriza is just as bad at clientelism as past Govts - cites 12 of 13 new civil service directors from Syriza #Greece

Deleted User wrote: »

The debt was sustainable in December, and is now unsustainable. What has changed?

You've got me there!

Jan Olbrycht (Polish Centre-Right) says that today's Council setup is a mistake and shouldn't be repeated. Polish people are watching closely what happens with Greece, we are making the decision whether or not to join the Eurozone.

marmurr1916

Deleted User wrote: »

Janusz Korwin-Mikke (Polish Independent) calls for a military coup in the style of Pinochet and the destruction of the European Union.

Another Friend of Syriza? :eek:

Eva Kaili (Greek Socialist) tells Tsipras that there are friends in this room, and with them we can we fight our enemies together.

Ashley Fox (British Conservative) states that Greece were only allowed to join the Euro as it was a political, and not an economic project. I'm not surprised that Greek people voted no. If I was a tax payer in a European country, I'd also vote no to giving Greece any money. Greece is bankrupt, and it's better to be honest. Mr. Tsipras, you are waiting to be kicked out so that you can play the martyr.

Pablo Inglesias (Spanish Left) says that 2015 is the year of change, and the left will soon be much stronger.

marmurr1916

In essence, Syriza is receiving support mainly from hard-left MEPs and right-wing (some far right-wing) eurosceptic and nationalist MEPs.

QuinDixie

Permabear wrote: »

This post had been deleted.

The original plan was flawed, we would have to invent a new word to fully explain the Austerity that was to be introduced. Def. a latin word of some type.

Greece are better off leaving the euro and the eu than implementing those plans. both ways are hellish for the Greek people, but at least full independence offers them control over their own destiny.

It's actually pretty farcical, is the Parliament always like this? Just trading insults pretty much. Not many new points being raised, just reiterated over and over again.

marmurr1916

Greece has now sent a formal request to the ESM (European Stability Mechanism) requesting a third bailout.

Live Squawk
‏@livesquawk

ESM Confirms Formal Loan Request Received From Greece $EURUSD

This chart shows which EZ countries must give parliamentary approval for this request:

Jonblack

marmurr1916 wrote: »

Are you aware that Ireland does not control the ECB's Governing Council? :rolleyes:



https://www.ecb.europa.eu/ecb/orga/decisions/govc/html/index.en.html



Basically the Irish representative on the ECB's Governing Council gets to vote only in certain months, and gets one vote out of a pool of eleven which is shared between fourteen EZ countries.


https://www.ecb.europa.eu/ecb/orga/decisions/govc/html/faqvotingrights.en.html

Eurozone finance ministers held an intense debate at their closed-door meeting over whether Athens should impose capital controls to stem the massive deposit withdrawals from Greek banks, three officials said.

Mr Schäuble and Mr Noonan argued forcefully for limits on the amount of ELA approved by the central bank unless capital controls were introduced. But there was no decision on whether such controls were needed and ECB officials hit back, saying ministers should not be weighing in on monetary policy.
Because only the ECB is allowed to weigh in on political matters, such as deciding when to halt Italian bond purchases

Never said he controls the ebc think the german might have a lot of influence. I think Mr Noone has stated that he has been misquoted.

marmurr1916

Deleted User wrote: »

It's actually pretty farcical, is the Parliament always like this? Just trading insults pretty much. Not many new points being raised, just reiterated over and over again.

The European Parliament has no say in this matter - the decisions will be taken by the Eurozone governments and several Eurozone countries' national parliaments.

Therefore MEPs can afford to engage in empty rhetoric.

Bob24

marmurr1916 wrote: »

Greece has now sent a formal request to the ESM (European Stability Mechanism) requesting a third bailout.



This chart shows which EZ countries must give parliamentary approval for this request:

Finland and Estonia look like show stoppers. Two countries which tend to side on the non concessions to Greece camp and require absolute majority in parliament.

marmurr1916

Jonblack wrote: »

Eurozone finance ministers held an intense debate at their closed-door meeting over whether Athens should impose capital controls to stem the massive deposit withdrawals from Greek banks, three officials said.

Mr Schäuble and Mr Noonan argued forcefully for limits on the amount of ELA approved by the central bank unless capital controls were introduced. But there was no decision on whether such controls were needed and ECB officials hit back, saying ministers should not be weighing in on monetary policy.
Because only the ECB is allowed to weigh in on political matters, such as deciding when to halt Italian bond purchases

Never said he controls the ebc think the german might have a lot of influence. I think Mr Noone has stated that he has been misquoted.

As the bolded part suggests, the ECB is meant to be free of poltical influence and its officials, including members of the Governing Council, guard their independence carefully.

Noonan can argue for capital controls as forcefully as he likes at a meeting of the Eurozone finance ministers (the eurogroup) but, regardless of what the ministers think of his arguments, the final decisions rest with the ECB and its governing council.

Permabear

This post has been deleted.

Akrasia

Bob24 wrote: »

Regardless of what they would like, it is just a hard fact that Greece showed-up with no written proposal yesterday, not sure how you can deny that ...

They are sick of jumping through hoops. They're trying a new idea, force the ECB to put forward new proposals on threat of a 'Grexit'

The Greeks know that they'll almost certainly be leaving the Euro. The ECB has consistently rejected even the idea of any captal write downs on the Greek debt. Why would they bother coming up with proposals knowing that the ECB will reject them out of hand?

The ECB's mandate is around monetary stability, noone is expecting it to come up with a plan for the Greek economy (this is the job of the Greek leadership, the EZ's finance ministers, and to some extend the IMF).

The ECB are facing the potential break-up of their currency. This comes under 'monetary stability'. The ECB are not exactly disinterested parties in the Greek Economy. They have been a cause of a lot of the problems Greece are facing.

Lastly, if Greece wants to follow the proposals of the IMF they could have mentioned that earlier - but we all know aside from the ones they have cherry-picked they don't are not interested in what the IMF is saying (which is much more demanding than what the EU is asking for and is why Syriza has regularly asked for the IMF to be excluded from a potential 3rd bailout plan).

You can agree with the analysis of the current situation without agreeing with the proposals for how to deal with the problem

The current situation is that Greek debt is growing as a proportion of GDP because the Greek economy is in a depression. The way forward is either a stimulus package or a devaluation of the currency. The Euro is not going to devalue just for Greece, so they need a stimulis package.

If the ECB won't agree to a stimulus package, then the Greeks will be better off leaving the Euro and devaluing their currency.

Jonblack

marmurr1916 wrote: »

As the bolded part suggests, the ECB is meant to be free of poltical influence and its officials, including members of the Governing Council, guard their independence carefully.

Noonan can argue for capital controls as forcefully as he likes at a meeting of the Eurozone finance ministers (the eurogroup) but, regardless of what the ministers think of his arguments, the final decisions rest with the ECB and its governing council.

Correct. Noonan argued for capital controls as reported in the FT.

marmurr1916

Bob24 wrote: »

Finland and Estonia look like show stoppers. Two countries which tend to side on the non concessions to Greece camp and require absolute majority in parliament.

Especially after the recent elections in Finland which has led to the election of much higher numbers of MPs who think that supporting Greece previously was a big mistake.

The only way those parliaments will vote for a new deal is if the conditions imposed on Greece are even tougher than the conditions attached to the previous bailout programme.

Unless Tsipras swallows his pride and accepts those conditions, and then gets enough support in the Greek parliament (he'll probably have to rely on oppostion votes, hence the meetings with the opposition leaders and the Greek President), I can't see a deal being done.

It is open to many of the countries on that list to hold consultative referendums if a deal is struck this week.

I'm sure Tsipras would fully support a series of referendums. :P

marmurr1916

Jonblack wrote: »

Correct. Noonan argued for capital controls as reported in the FT.

That's a very long distance away from your original claim.

Akrasia

Permabear wrote: »

This post had been deleted.

Syriza has only been in power for 6 months. The Greek economy has been in a depression way before Syriza arrived.

It's a funny way of thinking.

Right wing 'austerity' policies cause economic depression

Depression causes political instability and the population turn to the radical left

Right wing politicians blame the radical left for the depression

NIMAN

I thought I heard the other day on the Beeb that Greece's figures were looking a lot more positive until Syriza came into power, when they started to go south again?

Akrasia

Akrasia wrote: »

Syriza has only been in power for 6 months. The Greek economy has been in a depression way before Syriza arrived.

NIMAN wrote: »

I thought I heard the other day on the Beeb that Greece's figures were looking a lot more positive until Syriza came into power, when they started to go south again?

Correct.

The Prediction: December 14th 2014 - The Economic Consequences of Syriza's Alexis Tsipras
The Outcome: July 7th 2015 - The Economic consequences of Syriza

Permabear

This post has been deleted.

Akrasia

marmurr1916 wrote: »

Another Friend of Syriza? :eek:

Just because right wing nationalists are making statements in support of Greece doesn't mean that they are political allies.

It's comments like this that are totally unhelpful.

I think the official term for it is 'sh1t-stirring'

Its a bit like a fundamentalist muslim supporting a fundamentalist christian's call to ban atheism.

Declaring these people to be 'friends' is dishonest as on another day of the week, they could be out slaughtering each other.

BoJack Horseman

Akrasia wrote: »

They are sick of jumping through hoops.

Were that so, sadly not.

They're trying a new idea, force the ECB to put forward new proposals

You are a fortnight behind.
Negotiations broke down when Syriza walked away.... The EU has proposed many measures to make Greece stronger.

The Greeks know that they'll almost certainly be leaving the Euro.

The past 6 months confirm that was syrizas plan.

The ECB has consistently rejected even the idea of any captal write downs on the Greek debt

Not sure about that?

Why would they bother coming up with proposals knowing that the ECB will reject them out of hand?

Because most of the money is owed elsewhere

The current situation is that Greek debt is growing as a proportion of GDP because the Greek economy is in a depression.

It wasnt until opinion polls running up to the Jan GE showed Syriza the likely winner.

The way forward is either a stimulus package

Greece has had the stimulus of literally hundreds of billions of externally invested Euros to little avail.... The problem isn't 'stimulus'.

The Euro is not going to devalue just for Greece

Its devalued by 25% in the past year!

If the ECB won't agree to a stimulus package,

You confuse the role of the ECB.... No one is stopping Greek stimuli but their government.

then the Greeks will be better off leaving the Euro and devaluing their currency.

Agreed, as the Euro will be better off without them.

BoJack Horseman

BoJack Horseman wrote: »

Greece has had the stimulus of literally hundreds of billions of externally invested Euros to little avail.... The problem isn't 'stimulus'.

Over a large timeline, yes. But in terms of a stimulus package, absolutely not. The hundreds of billions were 'injected' over the 1990s and 2000s, one would have hoped to create lasting infrastructure and investment, however we're quite confident following the GDP cliff that most of it was flitted away.

Greece is desperately in need of a stimulus package, and one was on the table pending reform. (€35bn)

Without reform the cash injections will once again be flitted away. The buffer offered by the EZ should have been used to get these reforms in order so as to present a somewhat more attractive case for investment. However it was not used to do so.

There's a chicken and egg scenario here. Can they reform without cash injection? Some say no. Others say that cash injection needs to precede reform as the will to change and benefits of change are not as easily visible. Both cases are logically sound imo.

marmurr1916

Akrasia wrote: »

Just because right wing nationalists are making statements in support of Greece doesn't mean that they are political allies.

It's comments like this that are totally unhelpful.

I think the official term for it is 'sh1t-stirring'

Its a bit like a fundamentalist muslim supporting a fundamentalist christian's call to ban atheism.

Declaring these people to be 'friends' is dishonest as on another day of the week, they could be out slaughtering each other.

Syriza's coalition partners in the Greek government, ANEL, are right wing nationalists.

Syriza could have chosen to form a coalition with To Potami, a moderate Greek party that's pro-European.

Instead they chose to form a government with their fellow nationalists.

Fact, not sh1t-stirring.

Permabear

This post has been deleted.

BoJack Horseman

[Deleted User] wrote: »

Can they reform without cash injection?

Of course.

Reform is another way of saying: 'passing bills'.
It only requires will.

It isn't hard, it just takes a mindset that embraces wealth creation,rather than one seeking to destroy it.

- No 37% corporation tax
- no increased employment taxes.
- maintain reduced VAT on hospitality sector.

All growth friendly, all will stimulate.

However to do this, they need the political will to actually bother collecting existing taxes.... (€5bn outstanding YTD).
Greece has plenty of wriggle room if it bothered to do its job.

BoJack Horseman

BoJack Horseman wrote: »

Of course.

Reform is another way of saying: 'passing bills'.
It only requires will.

It isn't hard, it just takes a mindset that embraces wealth creation,rather than one seeking to destroy it.

- No 37% corporation tax
- no increased employment taxes.
- maintain reduced VAT on hospitality sector.

All growth friendly, all will stimulate.

However to do this, they need the political will to actually bother collecting existing taxes.... (€5bn outstanding YTD).
Greece has plenty of wriggle room if it bothered to do its job.

I agree to an extent. I don't believe that there's been near enough of an attempt at reformation by any of the Greek politicians, right wing, left wing, centre back or anyone!

However we now have a whipped up electorate, frenzied into desperation who realistically are desperate for a difference at this stage. They are not to be utterly discounted in this, as they are an enormous part of what needs to change (reform). Governments can change tax rates all they want if nobody pays any heed to them. There's a societal issue in Greece that not one single parliamentarian has even spent a moment addressing, because it would cost them their career instantly.

The electorate might just need something. Not just the promise of milk & honey. They might need something in order to mature and bring about the necessary systemic changes.

marmurr1916

The Bank of Greece has requested more ELA from the ECB:

Peter Spiegel ‏@SpiegelPeter 11m11 minutes ago

The @ECB gov council to hold conference call this afternoon after Bank of #Greece req for more ELA. Latest updates: http://on.ft.com/1TkTM8s

I'd imagine that the extra ELA will be granted until Sunday at least.

After that, if there's no deal, ELA is likely to be withdrawn or capped at a limit which will effectively close down the Greek banking system.

marmurr1916

Deleted User wrote: »

I agree to an extent. I don't believe that there's been near enough of an attempt at reformation by any of the Greek politicians, right wing, left wing, centre back or anyone!

However we now have a whipped up electorate, frenzied into desperation who realistically are desperate for a difference at this stage. They are not to be utterly discounted in this, as they are an enormous part of what needs to change (reform). Governments can change tax rates all they want if nobody pays any heed to them. There's a societal issue in Greece that not one single parliamentarian has even spent a moment addressing, because it would cost them their career instantly.

The electorate might just need something. Not just the promise of milk & honey. They might need something in order to mature and bring about the necessary systemic changes.

That something might be the shock of crashing out of the euro.

marmurr1916

marmurr1916 wrote: »

That something might be the shock of crashing out of the euro.

Unfortunately, I agree. I hope not though.

BoJack Horseman

[Deleted User] wrote: »

Governments can change tax rates all they want if nobody pays any heed to them.

As I said.... All it takes is for a government to do their job.
I said there was no need to raise rates if they just collected existing rates.

Its down to will.

The electorate might just need something. Not just the promise of milk & honey. They might need something in order to mature and bring about the necessary systemic changes.

They are being offered:
- national debts at nearly zero interest
- with maturities decades long.
- with writedowns if they make their economy stronger.
- while continuing access to the largest free trade area, the largest free movement area & seemingly unlimited free debt assistance area on earth!!

And all Greece has to do is run a day-to-day profit of €2bn per annum! (1% of GDP) to ensure the catastrophe does not reoccur.

The Greek statistical agency confirmed that uncollected taxes for April & May amounted to the €2bn needed to get this incredible deal.

It seems the Greek citizens are being kept in the dark about how incredibly generous the terms are

zl1whqvjs75cdy

This ELA that's being extended to the Greek banks, if they leave the Euro is that gone for good too? Is ELA like a loan or is it something else?

marmurr1916

The penny has finally dropped at the Guardian:

Truth is, back in Athens very few have any idea what the proposed agreement now involves. After five months of bungled handling of negotiations under Tsipras, all they know is that any deal is going to be much, much tougher than originally thought given the Greek economy’s freefall following the closure of Greek banks.

http://www.theguardian.com/business/blog/live/2015/jul/08/greece-battles-to-avoid-grexit-live

That's about as critical a statement of Tsipras as I've seen there in the past five months.

BoJack Horseman

marmurr1916 wrote: »

The penny has finally dropped at the Guardian:

The penny dropping at Syriza's media wing would make quite a clang!

BoJack Horseman

donkeyoaty0099 wrote: »

This ELA that's being extended to the Greek banks, if they leave the Euro is that gone for good too? Is ELA like a loan or is it something else?

Its a loan that the ECB authorise the GCB give to its banks.

BoJack Horseman

BoJack Horseman wrote: »

They are being offered:
- national debts at nearly zero interest
Almost irrelevant to a Greek Person
- with maturities decades long.
Almost irrelevant to a Greek Person
- with writedowns if they make their economy stronger.
Almost irrelevant to a Greek Person
- while continuing access to the largest free trade area, the largest free movement area & seemingly unlimited free debt assistance area on earth!!
This is not new

I absolutely wholeheartedly agree with slamming the political classes not understanding the extent of the deal, but I can understand how a Greek 21 year old who's never had a job being utterly frustrated and feeling 'beaten' by the whole event and who the current status quo just isn't good enough for.

Greece does need investment to spur growth. This is absolutely clear.
However it also does not need bad investment, which is what a stimulus package without reform might turn any investment into.

The political 'prowess' and stirring up of Syriza has had a societal effect that we cannot just ignore and hope can be placated.

Equally (and more so probably) it cannot simply be take and take and take. Greece must reform. Must. Far too many promises gone broken over and over again. There is no right time to reform, there is only now available. Solidarity is not a unilateral concept.

marmurr1916

donkeyoaty0099 wrote: »

This ELA that's being extended to the Greek banks, if they leave the Euro is that gone for good too?

Yes. The ECB only deals with eurozone countries.

donkeyoaty0099 wrote: »

Is ELA like a loan or is it something else?

Explanations of ELA:

ELA is effectively emergency loans given by euro zone national central banks to strapped commercial banks.

The loans are given at the discretion of the national central bank although they have to be approved by the ECB.

The ECB defines ELA as support given by central banks in "exceptional circumstances and on a case-by-case basis to temporarily illiquid institutions and markets".

It adds that the national central banks may provide ELA "against adequate collateral" and only to "illiquid but solvent" credit institutions.

Any changes to the limits of ELA require a two-thirds majority in the ECB's 23-member Governing Council. The Governing Council approves maximum ELA amounts for each individual bank.

A key justification for ELA provision is to "prevent or mitigate potential systemic effects as a result of contagion through other financial institutions or market infrastructures."

ELA is subject to a ban on the ECB financing governments, which is set out in the central bank's founding treaty.

ELA loans sit on the balance sheet of the national central bank and therefore that of the Eurosystem of Central Banks (the euro zone's 17 national central banks plus the ECB), but not directly on the ECB's own balance sheet.

It does appear in the ECB's daily calculations of liquidity as part of the "autonomous factors" header.

Governments are ultimately responsible for any losses from ELA given by their central banks, as they underwrite them.

The exact details of ELA are not published but the average interest rate charged on it is estimated to be around 100 to 150 basis points above the ECB's overnight lending rate at the time. The overnight lending rate is currently 1.5 percent.

The collateral banks post when using ELA is typically of a lower average quality than is accepted by the ECB.

Despite the stipulation that the use of ELA should be temporary, Ireland used it to prop up its banks for months. After Ireland clinched a deal under which failed lender Anglo Irish's promissory notes were exchanged for government bonds, the ECB said Ireland ELA programme was discontinued.

Use of ELA by Cypriot banks jumped in June after the ECB discontinued admitting the country's sovereign bonds as collateral in regular ECB liquidity operations, due to their low credit ratings.

Some national central banks, but not all, provide details on ELA use. The Bank of Greece provided 31.4 billion euros of ELA in January*. Belgium has also used it.

*January 2013.

http://uk.reuters.com/article/2013/03/21/uk-factbox-ecbs-emergency-idUKBRE92K0DT20130321

The European Central Bank’s governing council is due to meet on Monday to decide whether to maintain loans to Greece’s desperate banks to avert a collapse of the country’s financial system. The ECB’s help, provided by the Bank of Greece, is known as emergency liquidity assistance. But why does it exist and how does it work?

Bagehot’s idea was that, as the monopoly issuers of currencies, central banks can calm market panics by quickly pumping a lot of money into banks. If people think that central banks are credible, it will stop a run on a bank.

The idea works because if people think their bank has access to central bank funds, they’re less likely to need to withdraw their savings. That, in turn, means banks need fewer funds to cover withdrawals of deposits.

Central banks were quick to take Bagehot’s advice and develop what is known as lender of last resort support. Including the ECB, when it was created in 1998.

However, because lender of last resort support is provided only in times of emergency, the responsibility for providing the facility was left with national central banks, such as the Bank of Greece, not with the ECB’s governing council which is made up of the central bank governors from the 19 nations that use the euro. It also includes the ECB’s top six officials.

The other national central banks and the ECB’s governing council can block requests from the Bank of Greece with a two-thirds majority. This happened last week, when the council froze ELA at €89bn.

http://www.ft.com/cms/s/0/fbdadaea-23c2-11e5-bd83-71cb60e8f08c.html

So the national central banks provide ELA to the banks in their country but the European Central Bank must approve the amount of ELA and can block any increases in ELA.

The Bank of Greece (Greece's central bank) provides ELA to the banks in Greece. It has received approval from the ECB to provide up to €89 billion worth of ELA but it wants to increase that amount again so that the Greek banks have enough money to keep operating.