The European Parliament wants a haircut on ECB and IMF bonds
The European Parliament wants a haircut on ECB and IMF bonds
Possibility for haircut on deposits over 100,000 euros - Troika is dead, but the guardianship will stay, Karas says
A haircut on the Greek debt, ECB bonds, and deposits of more than 100,000 euros, are the solutions that the group of the European Parliament investigating the role of the Troika in countries under a memorandum puts on the table.
"The action of the Troika was devastating to any country it went," European Parliament vice president Othmar Karas said in Athens after the morning meeting with Yannis Stournaras.
"Troika died. After May it will be located only in Greece and Cyprus, and for this we must prepare a European surveillance mechanism with the European Commission at its core."
"Without a debt haircut the Greek debt is not going to get sustainable," Liêm Hoang-Ngoc supported and confirmed that the scenario was discussed intensely since just today the delegation of the European Parliament had contacts with IMF representatives who said that the Fund is discussing this eventuality.
Possibilities for a haircut on deposits
Based on what Ngoc said, a haircut of deposits in the future if the involvement of the private sector in bail-in projects is deemed, necessary should not be excluded. But nobody wants to mess with deposits under 100,000 euros.
"The action of the Troika was devastating to any country it went," European Parliament vice president Othmar Karas said in Athens after the morning meeting with Yannis Stournaras.
"Troika died. After May it will be located only in Greece and Cyprus, and for this we must prepare a European surveillance mechanism with the European Commission at its core."
"Without a debt haircut the Greek debt is not going to get sustainable," Liêm Hoang-Ngoc supported and confirmed that the scenario was discussed intensely since just today the delegation of the European Parliament had contacts with IMF representatives who said that the Fund is discussing this eventuality.
Possibilities for a haircut on deposits
Based on what Ngoc said, a haircut of deposits in the future if the involvement of the private sector in bail-in projects is deemed, necessary should not be excluded. But nobody wants to mess with deposits under 100,000 euros.
Specifically, the French MEP said that "many in Europe want to avoid the scenario of Cyprus. And when it happened in Cyprus they were discussing a haircut for deposits below 100,000 euros, violating the EC Directive on their protection. If something like that were to happen we would have interfered with Olli Rehn. We want to avoid, insofar as possible, a haircut on deposits that will be too burdensome for depositors."
"A haircut could be performed in bonds held by the European Central Bank. In the case of Greece, the ECB was the only that did not suffer any losses. Having bought 34 billion euros of Greek state bonds on the secondary market, there could have been a haircut just for it. And if they say that this would affect the monetary rate and create inflation, there is no problem because today in the EU we have deflation."
"A haircut could be performed in bonds held by the European Central Bank. In the case of Greece, the ECB was the only that did not suffer any losses. Having bought 34 billion euros of Greek state bonds on the secondary market, there could have been a haircut just for it. And if they say that this would affect the monetary rate and create inflation, there is no problem because today in the EU we have deflation."
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