Grexit Daily News – 28 June 2015

grexit daily news

28 June 2015  —  Tsipras yells Allahu Akbar, while country braces for explosion

Unfortunately, my worst fears about Syriza, its objectives and capacity to govern have come true. Spectacularly Tsipras announced early on Saturday morning (or late Friday evening depending on your time zone) a referendum.

What will the referendum be on? Remarkably the question will be “Do you accept the institutions’ proposal as it was presented to us on 25th June in the Eurogroup?”. As I wrote already (see here) this is a farce. Syriza is asking people to vote on a proposal that was never final (it was part of the supposed negotiation) and is now not available. The Eurogroup on Saturday withdrew this proposal. How is possible to ask people to accept a proposal that does not exist?

Varoufakis told us the following on his blog:

To those who say that, effectively, this is a referendum on the euro, my answer is: You may very well say this but I shall not comment. This is your judgement, your opinion, your interpretation. Not ours! There is a logic to your view but only if there is an implicit threat that a No from the Greek people to the institutions’ proposal will be followed up by moves to eject Greece, illegally, out of the euro. Such a threat would not be consistent with basic principles of European democratic governance and European Law.

Do you not understand Professor, or do you really think you can deceive us with this legalistic nonsense? Of course you cannot be forced out. You could be marginalised perhaps, but not kicked out. Greece will beg to be let out.

The freezing of ELA support by the ECB for the Greek banking system today necessitated the imposition of capital controls and a week-long bank holiday beginning on Monday. The end of the programme on Tuesday may mean that the ECB completely stops ELA on Wednesday morning. Remember, frozen is not ended (for the time being). Without liquidity support, the Greek banks will need to stay closed. How do you propose to recapitalise the banks Professor?

Where you to issue T-Bills (I am guessing that if ELA stops, then the ceiling on T-Bill issuance goes with it), who would buy them and at what price? 3 month paper at 60% interest maybe?

You will default on the IMF on Tuesday. This will probably not put Greece on a default credit rating. If you also default on the ECB and EFSF/ESM loans, then it will. Once the banks take the asset impairment on their excessive holdings of GGBs they will be insolvent. How will you deal with that?

Do you not understand Professor that YOUR ONLY OPTION WILL BE TO PRINT YOUR OWN CURRENCY?

As to the legal situation regarding Grexit from Euro AND the EU, read this, it will enlighten you.

Varoufakis claims that the Syriza government could not pass the proposal (neither the creditor’s nor its own it seems) through the Parliament.


Varoufakis claims that the Question on the Referendum cannot be In or Out of the Euro. Yet, this is the only real question here. If Greeks want to stay in the Euro, they will need to take the pain of austerity. If they do not, they will have to take the pain of adjustment to the national currency.


Varoufakis claims that Syriza will stay in power and implement the agreement if a vote is YES. This is farcical. Syriza rejects this proposal saying that it is antithetical to its principles, yet does not have the decency to resign and let someone else who believes in cooperation and Euro-membership to implement it? Even this is a joke. There is no agreement to implement. This was no official last offer from the #Eurogroup.

Tsipras went on TV tonight to blame Capital Controls on the Europeans. He is being deceitful at worst or ignorant at best. The imposition of Capital Controls was the only available step after Syriza sunk the deal and walked away from negotiations days before the Bailout deal ended.


Syriza needs to resign NOW, a national emergency government needs to be formed to achieve a deal that restarts the country’s banking system before Grexit becomes a fait-accompli. The farcical Greferendum needs to be BOYCOTTED,





3 thoughts on “Grexit Daily News – 28 June 2015

  1. “The freezing of ELA support by the ECB for the Greek banking system today necessitated the imposition of capital controls and a week-long bank holiday beginning on Monday. The end of the programme on Tuesday may mean that the ECB completely stops ELA on Wednesday morning.”

    How exactly would that happen? The ECB has advanced money to Greek banks based on the ELA limit of 90bn. What are you saying here, all of a sudden on Wednesday, it wants its money back? Of course not?

    The only thing the ECB can do is lower the limit, as the need for ELA disappears. The need for ELA will disappear, thanks to capital controls introduced. As there is no money fleeing the country, there is no need for ELA. As money comes back, ELA can be reduced.

    Capital controls are a much better way to ensure Greeks finance their own state than ELA.

    Here some further thinking:


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