Greece news: Brussels prepares to release emergency loan to get Greece through July - As it happened 17 July 2015

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Alexis Tsipras's grip on power suffers a blow with 32 of his own MPs rebelling as the Greek parliament votes in favour of new austerity measure against a backdrop of violence on the streets of Athens

Round up the day's events

• The European Central Bank increased the funding available to Greek banks, meaning that lenders might open for the first time in three weeks on Monday.

• On Friday, the German Bundestag will vote on whether or not to approve a new rescue. Austria's parliament's will do the same. Both will need to pass a vote by a majority.

• However, talks over securing a new €86bn bail-out are likely to last for another four weeks.

16.40

AEP: Versailles Treaty does not capture the depravity of Greece's settlement

What Greece is being asked to do is scientifically impossible. Almost everybody involved in the talks knows this. Yet the lie goes on because the dysfunctional nature of EMU politics and governance makes it impossible to come clean. The country is dishonestly kept in a permanent state of crisis.

Wolfgang Schauble is one of the very few figures who has behaved honourably in this latest chapter. As readers know, I have been highly critical of the hard-bitten finance minister for a long time, holding him directly responsible for the 1930s regime of debt-deflation and contraction imposed on much of Europe, and for refusing to accept that the eurozone's North-South divide must be closed by both sides. Any policy that puts all the burden of adjustment on the South is destructive and doomed to failure.

But he is entirely right to argue that a velvet divorce and an orderly exit from the euro for five years would be a “better way” for Greece, as he did on Germany radio this morning.

16.21

Keeping track of Greece's politicians isn't easy

Greek journos with the current ministers list, preparing for the reshuffle at Maximou #Greece #Tsipras @BILD pic.twitter.com/6h3L4Ri8x7

— Liana Spyropoulou (@LSpyropoulou) July 16, 2015

15.40

Greek banks to reopen. but ELA might not last forever

The increase in ELA announced by the ECB will be enough to get Greek banks open again on Monday, according to Reuters, who cited a senior banker.

But that incremental increase won't last. The raise was "a reciprocal gesture following recent political developments", said Ken Wattret of BNP Paribas.

The Greek Government has passed new austerity measures, paving a way for talks to open on a third bail-out for the country, and so the ECB has offered its support.

Yet despite stressing that the ECB would not bow to political pressures to cut off assistance to Greece, the central bank's support would not be open-ended and unlimited, Mr Draghi made clear.

14.30

Now Cyprus can have QE, but not Greece

The ECB has started buying up Cypriot bonds as part of its QE programme. But Greek instruments remain ineligible.

If Greece did repay the ECB that would leave room for the central bank to buy the country's bonds, Mr Draghi suggested.

Regarding Syriza's ability to implement the reforms it's signed up for, and to repay the country's creditors, Mr Draghi said: "There are questions about implementation: will and capacity, up to the Greek Government to dispel these doubts."

14.15

Greece set to repay ECB and IMF debts owed on Monday

Mario Draghi believes that Greece is going to be able to pay back the money it owes the European Central Bank on Monday - €3.5bn - and will also be able to pay back some of the cash it owes the IMF.

"We will be repaid, as will the IMF" #Draghi EFSM financing will be released by Monday then.

— Mehreen (@MehreenKhn) July 16, 2015

14.02

Debt relief is necessary for Greece, says Draghi

Moments after saying that it's not the ECB's role to wade into the politics of the euro area, Mr Draghi said that some sort of debt relief is "necessary" for Greece.

Getting debt relief is one of the most controversial parts of the crisis negotiations. The question is not whether to do it, but what form of debt relief is best, he added.

Draghi says no one questioning whether debt relief is necessary. The question is how to do it legally

— Megan Greene (@economistmeg) July 16, 2015

Mario Draghi says it’s uncontroversial debt relief is necessary in Greece. Yes from an economist’s perspective. Not a (German) politician’s

— Ed Conway (@EdConwaySky) July 16, 2015

13.58

Cutting ELA would require the ECB to ignore its mandate, says Draghi

The ECB president has slammed those demanding that the central bank should cut the liquidity it provides to Greek banks.

To do so would be to ignore the ECB's own mandate, he said, and to decide on who should be a member of the eurozone.

This was the longest answer to a reporter question I've ever seen Mr Draghi give.

13.47

ECB upped assistance to Greece in vote of confidence

The European Central Bank opted to raise its emergency liquidity assistance to Greek banks on Thursday, according to Mr Draghi. It's been increased by €900m over one week, he said.

That liquidity has been vital to Greek banks suffering from mounting deposit flight. It suggests the central bank is more confident about a good resolution to the crisis.

"Some scholars suggested that we should have cut ELA to Greece some time ago," Mr Draghi said, but added that it was not up to the ECB to decide which countries will be euro members.

He said that the ECB is acting on the assumption that Greece will stay in the euro.

But the increase isn't all that big. We might not see banks stay open for business at those levels, and we're certainly unlikely to see capital controls disappear.

Goes to show, when there's political commitment for a deal for Greece, the ECB will play ball. https://t.co/BrOsYjIXKN

— Megan Greene (@economistmeg) July 16, 2015

ELAtion

— modest proposal (@modestproposal1) July 16, 2015

13.42

Risks 'contained' says ECB

Source: www.telegraph.co.uk

Category: Bank

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