Greek spokesman says June 5 will be “the moment of truth”, as the ECB considers whether to keep supplying emergency support to its banksLatest: Left-wingers could rebelMoody’s: High likelihood of Greek deposit freezeGreece: Won’t repay IMF unless deal reached soonEuro takes a dive 11.53am BST Over in Athens there is mounting speculation that prime minister Alexis Tsipras is struggling to control his increasingly fractious far left Syriza party. “The party can’t have its feet in two boats.” “The big question is can Tsipras strike a deal inside his own party when so many are now speaking openly about the benefits of going back to the drachma? Personally, I seriously doubt that they can find an internal, workable compromise.”“An agreement with the “institutions will either comply with the government’s programme or it can’t happen, and it that case it won’t happen.” 11.37am BST The risk of Greece freezing bank accounts and imposing restrictions on the movement of money has “materially increased” in the last few weeks, rating agency Moody’s has just warned.The outlook for the Greek banking system is negative, primarily reflecting the acute deterioration in Greek banks’ funding and liquidity, says Moody’s Investors Service in a new report published recently.These pressures are unlikely to ease over the next 12-18 months and there is a high likelihood of an imposition of capital controls and a deposit freeze.Moody’s notes that significant deposit outflows of more than €30 billion since December 2014 have increased banks’ dependence on central bank funding. In our view, the banks are likely to remain highly dependent on central bank funding, as ongoing uncertainty regarding Greece’s support programme continues to compromise depositors’ confidence.*MOODY'S: PRESSURES ON GREEK BANKING UNLIKELY TO EASE 12-18 MOS 11.11am BST Greek finance minister Yanis Varoufakis has now published a transcript of his interview with Die Zeit (see earlier post).It shows Varoufakis described Wolfgang Schauble as a “legendary” figure...although one whose view of the crisis should be challenged. YV: I would tell my daughter that it is, from my perspective, a multi-layered relationship. There is a sense of awe that I feel from meeting with a legendary figure whose work I have been following critically for decades. Then there is a strong urge to counter his overarching approach to common problems regarding Europe. Additionally, there is some frustration at not having the opportunity to discuss in a different setting; to stage these meetings in a proper federal, democratic context in which arguments, rather than relative power, would play a more prominent role.YV: That Europe needs a political union and that, without it, our monetary union is problematic.YV: Yes I do (as I am sure he thinks that I err in my analysis). Primarily, he associates past Greek governments with the Greek people; as if the former reflect the character of the latter. And he does not appreciate how helpful it would be for mainstream Northern Europe to find a modus vivendi with a movement (like SYRIZA in Greece) which may be very critical of European institutions but which is profoundly pro-European and eager to help bring Europe closer together.My answers (verbatim) to Die Zeit on Dr Schäuble http://t.co/l4kOBFGqhT 11.06am BST Investors just paid for the privilege of lending money to Portugal, suggesting investors aren’t panicking about an anti-austerity government winning power this autumn.The Lisbon debt agency just sold €300m of six-month Treasury bills at an average yield of -.002%. Portugal joining the party. *PORTUGAL SELLS 6-MONTH BILLS AT NEGATIVE YIELD FOR 1ST TIMEPortugal sells 6 month T-Bills at a negative yield. Is this the same Portugal that might be electing an anti austerity gov't in October? 10.38am BST In another sign of rising tensions, Greek pensioners are holding an anti-austerity protest in Athens, against cuts to welfare and healthcare.The demonstration, which looks peaceful, could be a taste of what’s to come if Greece is forced to implement more cutbacks by its lenders. 10.21am BST Greek finance minister Yanis Varoufakis has apparently told a German newspaper that his counterpart, Wolfgang Schäuble, makes mistakes in his analysis of Greece.The left-wing economist, asked by Die Zeit in excerpts of an interview to be published on Thursday whether the conservative finance German minister commits such mistakes, answered: “Yes, he does.”“It is frustrating that we are not able to speak with each other in a context where arguments count more than relative power.”In case a Greek deal wasn't hard enough @yanisvaroufakis gives interview: *SCHAEUBLE'S ANALYSIS OF GREECE IS FLAWED, VAROUFAKIS TELLS ZEITThis @yanisvaroufakis interview with Die Zeit is something else. Quite personal. *VAROUFAKIS SAYS SCHAEUBLE EMPHASIZING POWER OVER ARGUMENT: 10.14am BST A second Greek government representative has now declared that Athens will miss its €305m repayment to the IMF early next month, unless a deal is reached.Thanassis Petrakos, Syriza’s parliamentary spokesman, echoed Nikos Filis’s comments this morning, on Star TV.Both parliamentary spokesmen of #Syriza, Filis & Petrakos, repeated this morning (different shows) that govt might actually not pay IMF.#Syriza spox Petrakos replies: "What can happen to us [if we don't pay the IMF]? Nothing is going to happen to us!" #GreeceThese. People. Are. Dangerously. Foolish. #Greece 9.41am BST Britain’s central bank can’t agree whether wage are going to rise strongly, or not.This is the key bit of the MPC minutes. Pay growth & inflation might pick up quickly... Or they might not... pic.twitter.com/8FyR96ZeQW 9.39am BST The Bank of England also believes UK economic growth will accelerate this quarter, after slowing to just 0.3% in the first three months of 2015.The Committee judged that GDP growth would pick up in Q2 to close to its historical average rate, supported by the boost to real incomes from the fall in food, energy and other import prices, and would continue to grow at, or just a little below, historical average rates throughout the forecast period. 9.37am BST The Bank of England’s monetary policy committee was unanimous in voting to leave interest rates unchanged this month, according to the minutes of the meeting which were just released.However, the decision of whether to hold or raise Bank Rate was “finely balanced” for two MPC members.While there was a range of views over the most likely future path for Bank Rate, all members agreed that it was more likely than not that Bank Rate would rise over the three-year forecast period. Minutes of the MPC Meeting held on 7 and 8 May http://t.co/23rf87VcTR 9.16am BST Europe’s stock markets are rather becalmed this morning, as the Greek crisis continues to worry traders.Most of the major indices are slightly in the red:Unfortunately Greece remained a thorn with no positive developments and reduced expectations of a swift solution. 9.00am BST We’re making progress with Greece, but we’re not there yet. 8.41am BST Greece’s governing Syriza party has called a rally in Paris tonight, to show support for Athens in its battle with its creditors.The event, at 18:30 in Republic Square, will call on Greece’s lenders to respect its “red lines”; the promises on pensions and labour market reforms, ahead of an EU summit tomorrow in Riga, Latvia.SYRIZA calls for a "Avec les Grecs" (together with Greeks) rally today in Paris, #France in place de la République. http://t.co/ts36jIYoOSIt seems that SYRIZA is trying to re-ignite people's support across Europe in head of the #eurogroup negotiation #greece #previoustweet 8.28am BST Investors are bracing for Greece to miss its €305m repayment to the IMF on June 5, says Mike van Dulken of Accendo Markets.In Europe this morning indications are that, while there has been progress in negotiations, Greece will miss its June debt payment to the IMF unless a deal is reached by the end of May.Concessions for Greece are highly unlikely - the EU will almost certainly face a second revolt in the form of Portugal’s ascendant socialists if any are afforded to Athens. 8.20am BST The foreign-exchange rigging scandal took another twist this morning.Swiss bank UBS revealed it had dodged being prosecuted by the US Department of Justice...because it blew the whistle that traders had been conspiring to fix the rates at which currencies were changing hands.The announcement from UBS signals that the US DoJ is preparing to impose punishments on other banks – including Barclays and bailed-out Royal Bank of Scotland – as soon as Wednesday. Barclays is also awaiting punishment from the FCA and has already prepared the ground for penalties of as much as £2bn.The punishments, also expected on two US banks, could result in total penalties of over £3bn and require the banks to plead guilty to offences relating to manipulating foreign exchange markets – a sanction rarely imposed by the DoJ Related: UBS facing £350m in fines as banks hit with fresh sanctions for forex rigging 8.09am BST The euro fell sharply following the warning that Greece could miss its repayment to the IMF on June 5.It hit a two week low against the US dollar at $1.107. 8.03am BST Greece will prioritise pensions and wages rather than repaying the IMF, if creditors don’t unlock some of the €7.2bn in outstanding bailout funds, added Nikos Filis.“There is no money for the foreign (lenders) when they have not given us any funds for a year...We don’t have it to make the payment and this is part of the discussion.” 7.54am BST The Greek government has warned that it will miss its next repayment to the International Monetary Fund unless a deal is reached soon.Nikos Filis, the government’s parliamentary speaker, raised the stakes in its negotiations with its lenders this morning.“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5.“If there is no deal by then that will address the current funding problem, they won’t get any money.”GREECE WILL NOT MAKE JUNE 5 IMF LOAN REPAYMENT IF NO DEAL WITH LENDERS IS REACHED BY THEN- GOVT PARLIAMENTARY SPEAKER - RTRS 7.52am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. It is possible that two thirds of the council will support the move as soon as the Wednesday vote.The haircuts were lowered last year after Greece returned to capital markets. The council is considering returning to the levels applied before the reduction, according to two people familiar with the matter.ECB ensnared in politics as it faces vote on Bank of Greece loans: http://t.co/PH8k3ORqmS #FT Continue reading...
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