Rolling coverage as finance minister Yanis Varoufakis meets Wolfgang Schäuble, after the ECB hits Greece with the news it will no longer accept its junk-rated debt as collateralPress conference at 12.30 CET (ish)Greek bonds and shares tumbleIntroduction: Finance ministers meet in BerlinECB tightens screw on Greece: What the experts sayProtests called in Athens tonight 12.27pm GMT Reforms and investment are indispensable, says Schäuble....And he lays out how Greece must reform its tax system: 12.25pm GMT Greece must continue to work with the IMF, the ECB and the EC, Schauble adds. 12.23pm GMT We agreed to disagree, Schauble says, over the steps that Greece must take now. 12.22pm GMT Schäuble says that he and Varoufakis probably wouldn’t be on the same side in an election battle (no argument there).Greece is making progress, the finance minister continues..... he cites falling employment and the creation of a primary budget surplus. 12.21pm GMT Schäuble adds that all European countries have suffered since the financial crisis.The most difficult journey in this process falls to Greece, this isn’t new, he says. 12.20pm GMT Schauble goes first - saying he has had a very long and constructive exchange with VaroufalisWe weren’t in full agreement, Schauble says, but that shouldn’t be a surprise. 12.18pm GMT 12.16pm GMT Finally, they’ve arrived... the press conference in the Berlin finance ministry is starting now. Reminder, there’s a live feed here. 12.16pm GMT There’s a new twist: to be reported! Russian president Vladimir Putin has waded in and called new Greek PM Alexis Tsipras, our correspondent Helena Smith reports “it is clear that there is going to be a future to this hot line,” says Mega TV.Regular readers will recall that the US president also waded in over the weekend declaring that Europe should begin focusing on growth and Greece should be given some slack. Last night, in what appears to be a watering down of that stance, the White House announced that Greece should toe the line and uphold the commitments it has made with its European partners. 12.15pm GMT A flicker of excitement sweeps the room... photographers strain to get a good view of the entrance... 12.10pm GMT Here’s the scene in the German finance ministry: 12.08pm GMT A good sign -- the live feed for the press conference between Wolfgang Schäuble and Yanis Varoufakis has burst into life.... 12.02pm GMT The press conference room at the Berlin finance ministry is packed. Just two men are missing....Faire patienter le public d'une salle pleine à craquer, petit plaisir des concerts à guichets fermés #Varoufakis pic.twitter.com/9aUIiZVrY5 12.00pm GMT The Bank of England has left UK interest rates unchanged at 0.5%, and left its asset-purchase scheme unchanged too at £375bn. 11.57am GMT how very unGerman... 12:30 (CET) start & no #Varoufakis or Schaeuble in sight Link: http://t.co/WMKcrLw618 pic.twitter.com/3CBx19w4yB 11.49am GMT How bad could it be?...@SpiegelPeter Or fighting maybe? 11.48am GMT This delay might be a good sign....Schäuble-Varoufakis meeting taking a bit longer than planned. Real negotiations?@YanniKouts Or lecturing at each other? 11.46am GMT There’s a crowd of media in the press conference room in Berlin, waiting.... 11.44am GMT Either I’ve got the time of this press conference wrong, or it’s running late, or the live feed isn’t working.... 11.35am GMT No action in Berlin yet...but back in Greece, the former prime minister Antonis Samaras has been speaking to his New Democracy party:Samaras to his MPs: We'll back efforts that help country, Syriza will be obliged to break campaign promises #Greece pic.twitter.com/KFkBAet49P 11.20am GMT Just 10 minutes until the press conference between finance ministers Schäuble and Varoufakis begins... Noch sprechen #Schäuble und #Varoufakis hinter verschlossenen Türen miteinander. Pressekonferenz um 12:30 Uhr. pic.twitter.com/9CoklowNC4 11.05am GMT 11.04am GMT A group of demonstrators gathered outside the German finance ministry in Berlin, holding signs reading “We start from Greece, we change Europe”.Berlin Soli demonstration for #Varoufakis in front of Schäuble's Castle pic.twitter.com/Mf8UfU77J9 10.58am GMT Our Berlin correspondent, Kate Connolly, reports that conservative daily Die Welt has tries to explain why Varoufakis will be received with a certain amount of skepticism in Germany, not least because of what is viewed as his scruffy dress habits, and bully-like manner.Here’s a flavour of Die Welt’s editorial, from Kate: “Varoufakis, the libertarian communist, is coming (to Germany) as if for a dog fight, his shirt not tucked into his trousers, an open collar. He is threatening, he is complaining, he wants victory - above all over Germany. Because of such a scholarly ruffian no one should feel they have to shit their pants, otherwise we’re bound to lose. With this background, it’s good that the federal government has so far held back. Only when it’s made known what concrete facts and comprehensible figures the Greeks are going to come up with, can any sort of compromise be negotiated”. 10.56am GMT The two finance ministers have posed for a photo too:@yanisvaroufakis and #Schäuble. pic.twitter.com/KDRjvM5oQ6 10.50am GMT Greek finance minister Yanis Varoufakis has arrived at the Finance Ministry in Berlin for talks with Wolfgang Schauble.Judging by this Reuters photo, he looked pretty relaxed despite the ECB’s move last night: 10.33am GMT French president Francois Hollande has backed the ECB’s collateral changes, Reuters reports: 10.20am GMT Bookmaker Paddy Power has cut its odds on Greece leaving the euro in the next three years.It is now offering 3/1 on Grexit , down from 4/1. The odds on Greece holding another general election in 2015 have been also cut from 11/4 to 9/4.“The Greeks haven’t been this cornered since the battle of Thermopylae and further pressure from the ECB could lead to Syriza backtracking on their commitment to keep Greece in the Eurozone.” 10.17am GMT Live ab 12:30h: Pressekonferenz mit @yanisvaroufakis und Wolfgang #Schäuble http://t.co/TF6MqxWl8z pic.twitter.com/IJImJK1WuI 10.12am GMT For the first time since 2007, the economy of every country in the EU is expected to grow this year #ECForecast @ecfin @EU_Commission 10.09am GMT However, the EC has cut its forecast for Greek growth this year.It now expects Greece’s economy will expand by 2.5%, down from 2.9% – and that’s before the recent political instabilityInterestingly @EU_Commission only downgrades #Greece 2015 growth 2.9% to 2.5%. But that's based on completing bailout. Which isn't happening 10.08am GMT Pierre Moscovici, Commissioner for Economic and Financial Affairs, says:“Europe’s economic outlook is a little brighter today than when we presented our last forecasts.” 10.07am GMT Breaking: The European Commission has raised its growth forecasts for the eurozone, but the outlook still looks tough.In its new forecasts, the EC predicts that eurozone GDP will rise by 1.3% in 2015, up from 1.1% three months ago. It believes the lower oil price, and the ECB’s new quantitative easing programme, will boost activity in the sluggish economy.Previsiones de Invierno de la Comisión Europea para España en 2015 y 2016 pic.twitter.com/ad0PKYHnGf 9.57am GMT Back in the Athens parliament, many MPs are taking a civil oath (echoing prime minister Tsipras’s own swearing-in last week)moving moment: majority of new Greek Parliament taking civic Oath; 135/ 300 new parliamentarians. Konstantopoulou the Parlament president 9.47am GMT We’re expecting Yanis Varoufakis and Wolfgang Schäuble to hold a press conference in Berlin at 12.30pm local time, or 11.30am GMT [1.30pm for readers in Greece].We will be covering press conference of Greek Finance minister Varoufakis in Berlin. Live on @Ruptly at 12:30h CET pic.twitter.com/Gd8uHj1WsH 9.44am GMT Over in Athens, the new parliament is being sworn in by the country’s religious leaders:#Greece: new parliament is being sworn in by the head of the Orthodox Church of Greece #Vouli pic.twitter.com/oO2nJyp0oyChristian oath administered in #Greece's parliament. MPs from New Democracy, IndGreeks, GoldenDawn raise right hand pic.twitter.com/3BVPiH1srT 9.44am GMT The Greek government insists that the ECB’s move is designed to put pressure on all sides, rather than an attack on Athens.In a statement, an official says: “Greece does not aim to blackmail anyone but will not be blackmailed either...The ECB’s decision ... is an act of political pressure to quickly reach a deal.” 9.40am GMT More reaction from the financial community.....@ECB move on Greece equivalent of taking the safety catch off. Refusal to allow ELA would be pulling the trigger.All I have to say is "everybody calm down" on #Greece - give them a little bit of time & Oh & if you don't understand #ECB don't trade 9.27am GMT A Greek government official has urged calm, telling Reuters that the country’s banking system remains protected - and insisting that the country will not be “blackmailed”: 9.10am GMT Bank of Piraeus' insane ride in the last two weeks -51%, surged back, down another 27% today http://t.co/5KJ3fv9bHB pic.twitter.com/mjcUXhQZgL 9.05am GMT Shares in Greece’s major banks have plunged by over 25%, as the ECB’s decision to tighten their access to cheap liquidity spooks the Athens market:Greece 3-year note yield +350bps. UGLY pic.twitter.com/ncLrECtrvR 8.52am GMT This isn’t the first time that the European Central Bank has faced accusations of meddling in politics; its decisions have helped shape the path of the eurozone crisis:For those arguing @ecb singling out @syriza_gr because of their politics, remember Ireland (2010), Spian (2011), Italy (2011), Cyprus (2013) 8.50am GMT The ECB’s decision is a blow to Alexis Tsipras’s government because it gives them much less time to haggle a deal. The existing bailout runs out at the end of February, at which point Mario Draghi and colleagues may well bar Greek banks from its emergency funding window [although that’s not guaranteed to happen]ECB compressing time is bad for Syriza. They'll have to give more, accept less in return to get a deal fast. That's why they wanted months. 8.44am GMT The Greek stock market has plunged almost 9% at the start of trading, as bank shares plummet by almost a quarter....The ECB’s move may be political, but it’s already shattering the fragile confidence that Athens might cut a deal with its lenders to ease its debt burden.#Greece Athens stock exchange begins session -8.93%#Greece Banks after minutes in session -23% 8.40am GMT Greek bonds have fallen sharply in value this morning following the ECB’s move.This has driven up the yield (or interest rate) on its 10-year debt by a whole percentage point, from 10.01% to 11.08%. 8.38am GMT Karl Whelan, professor of economics at University College Dublin, argues that people shouldn’t panic:At least, unlike in its previous “Fight Club” days, the ECB now admits that ELA is available and will step in to take the place of the regular Eurosystem lending that has been revoked. So there are no immediate implications for liquidity provision to the Greek banks. The ECB is flexing its muscles, letting everyone know that are very close to pulling liquidity from Greece but no funds have been withdrawn yet....On the positive side, this decision simplifies matters to their essence. As in Ireland and Cypus previously, whether the Greek banks can keep operating depends on the ECB’s discretionary decision on whether to keep approving ELA [emergency liquidity assistance]. And, as with those previous cases, the ECB has decided what it wants in return for ELA and is determined to get its way.Snapshots of this tweet have gone viral since last night #Greece #ECB #Varoufakis pic.twitter.com/gPnPzBubadVaroufakis is gambling that the Eurozone, and more particularly Germany, will not dare to push him off the cliff because of the consequences for international political relations. If Germany was seen to force Greece out of the Euro by refusing to negotiate, it would become an international pariah. There are already voices reminding Germany of its own debt forgiveness in 1953, and anti-austerity movements in many other Eurozone countries would only be encouraged by Germany and/or the ECB looking like bullies. Forcing Greece out of the Euro could result in the disorderly unravelling of the whole thing.I may be completely wrong, but this looks far more plausible to me than a simple explanation that fails to take account of the signals given by both Varoufakis and Draghi. In which case, Schäuble should beware. His position is nowhere near as strong as he thinks. He is dangerously close to the cliff edge himself. If Germany pushes Greece over the edge, Greece may well take Germany down with it. 8.24am GMT European stock markets have fallen this morning, with the FTSE 100 shedding 50 points, or 0.75%, to 6809.The negative open comes after the ECB suspended its waiver of Greek bonds being used as collateral as part of its current bailout program.Although this doesn’t affect counterparty status of Greek banks, who can still get liquidity via Emergency Lending Assistance (ELA), when coupled with existing political stubbornness it has revived fears of a messy Greek conclusion with the country potentially running out of money by March. 8.15am GMT #ECB announcement following #Varoufakis #Draghi meeting highlights anxiety over #Greece bailout. #Schaeuble meeting in #Germany later today 8.08am GMT The European Central Bank’s chief economist has defended removing the waiver that allowed junk-rated Greek bonds to be used as security for ECB loans.Peter Praet told Les Echos, the French newspaper, that it was simply following its own rules:“The conditions of access to liquidity from the European Central Bank are clear...If the conditions are not met anymore, the ECB must draw the consequences.” 8.04am GMT Anxious Europeans might also be interested in this petition calling for debt relief for Greece, from economist Philippe Legrain (a former advisor to European Commission president President Barroso).Please RT... Demand debt justice for #Greece. Sign our petition at http://t.co/flJ9nVuhhQ … We need a #EuropeanSpring Follow @EuropeSpring 7.58am GMT Greeks unhappy with the ECB’s move have called a rally in Syntagma Square tonight, the site of many protests since the debt crisis began:Rally in #Syntagma Thursday 6pm EET following #ECB announcement https://t.co/koQ3lRoIlU Seeing the turnout will be interesting. #Greecesocial media in #greece calling people to syntagma tonight for rally against #eu "blackmail" 7.47am GMT The European Central Bank’s decision to no longer accept Greek debt as collateral will force its government to moderate its position, predicts Gary Jenkins of LNG Capital:Greek financial institutions will still have access to liquidity via the emergency liquidity assistance programme via the Greek central bank, although the ECB gets to review this use every two weeks. So a very large warning shot has been fired across the Greek bows by the ECB.It is difficult to see this as anything other than a very aggressive move by the ECB. They did not need to do it now (they were expected to have to make a decision at the end of the month) and whilst they can claim that they are following their rules they have oft amended them during the crisis, as has the Eurozone as a whole. After all, there are not supposed to be any bail outs…“This is consistent with our expectation that the ECB will take a hard line on Greece.The ECB went as far as saying it can no longer assume bailout negotiations will be concluded successfully. Given Syriza was voted in to make some changes and take an aggressive stance, many now fear this will not be taken easily by the Greek population if the new government yields.Additionally, the ECB announcement is likely to result in a run on the banks....Some might now say that the Draghi did not like what he heard from Varoufakis so that he decided to tighten the screws. The pressure on the new Greek government not to exit the current bailout programme has clearly increased. 7.37am GMT The ECB’s surprise move on Greek debt last night even sparked an exchange between Channel 4’s Paul Mason, and the ECB’s head of comms Michael Steen:Where @paulmasonnews and the @ecb head of comms have a row about Greece pic.twitter.com/OSd3fCYDCP 7.30am GMT Good morning.Today, the finance minister of Greece’s new democratically elected government is in Berlin, meeting his democratically elected counterpart to discuss his proposal to ease the debt crisis gripping his country.The Governing Council decision is based on the fact that it is currently not possible to assume a successful conclusion of the programme review and is in line with existing Eurosystem rules.ECB lifts waiver of minimum credit rating requirements for marketable instruments issued or guaranteed by Greece http://t.co/zhFVuGS76bThe only surprise of ECB decision was timing. But what do you expect with Tsipras grandly telling everyone won't ask for program extension?The ECB - sorry, who elected you? - trying to crush Greece's elected government because they fear its example. An attack on democracy. Continue reading...
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