Just a day after the
European Central Bank abruptly cut off a key source of Greek funding, Greece’s
new finance minister Yanis Varoufakis capped off his tour of Europe with a stop
in Berlin to meet his German counterpart Wolfgang Schäuble.
“We agreed to
disagree,” Schäuble told reporters at a press conference afterward, emphasizing
that he didn’t support Greece’s latest request for three months’ worth of
funding that would give it time to get its financial house in order.
“We did not reach
agreement because it was never on the cards that we would,” Varoufakis said,
according to the Financial Times. “We agreed to enter into deliberations with
the orientation of a joint solution to European problems that’s going to put
the interests of Europe at the helm.”
Varoufakis has been
asking leaders around Europe to support a three-month bridge loan that could,
in theory, help Greece buy time to right its finances, while making promises
that Greek leaders would be embarking upon a “frenzy of reasonableness.”
Schäuble wasn’t
enthusiastic about the program, remarking that the proposed ideas “don’t
necessarily go in the right direction,” according to the Wall Street Journal.
Berlin was just the
latest stop in a series of meetings Varoufakis has been taking around Europe in
an effort to garner support for various plans.
The talk came just a
day after Varoufakis met with Mario Draghi, head of the European Central Bank.
Soon after the meeting, the ECB announced it would no longer accept Greek
government bonds as collateral for lending billions of euros to Greek
commercial banks, the BBC reported.
Until now, Greece’s
bonds were rated as junk, which meant the country had to rely on a special
waiver from the ECB that allowed it access to cheap financing. Now, Greek banks
can still access the money, but through Emergency Liquidity Assistance (ELA.)
This program means all
commercial banks will borrow from Greece’s central bank at a much higher
interest rate. The point is to isolate Greek banking problems from the rest of
the eurozone if its central bank has any trouble with the loans.
In response to the
Wednesday announcement, Athens' main stock index fell 9 percent, while shares
of Greece’s top banks fell as much as 27 percent.
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