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10 Apr 2015
Was Greece stalling its creditors all this while for a different plan? – Tor Vollaløkken
FXStreet (Barcelona) - Tor Vollaløkken of The EURUSD Insider, believes that the actions from the 22nd February meeting suggests that Greece was only buying time all this while for a possibly different Syriza Plan.
Key Quotes
“It is obvious that to set out measures that will satisfy creditors is an breach with most of the program Syriza was elected on and which they have said they will implement. As such it is not easy to set out measures all parties would be happy with. It likely is impossible.”
“That was pretty clear also six weeks ago and I see all that has happened since then as an attempt to gain time – not to comply with the agreement – but to prepare Greece for what is unavoidable in my view – an exit from the Euro area and to replace the euro with a new Drachma.”
“When you devalue a currency – or change it – you should do it during a weekend. Banks are then closed and people restrained from moving funds and withdrawing cash. Banks will go bust because of their liquidity situation and they would have to be nationalized. Bank accounts will be changed from euros to drachma without account holders consent and they likely will have to implement other capital controls.”
“All of this is easier to do and with less of practical problems to the financial system, the central bank and public offices when it happens over a weekend. It leaves businesses and the public trapped but that is the price they pay.”
“The longer the weekend is, the more of practical changes can be implemented before businesses open up again. This is why the Easter weekend is “perfect” and to me it looks like it has been planned ever since Syriza came to power.”
“It explains why their officials don’t stick to deadlines in terms of responding to creditors’ requests – or seem too worried about not securing help from their Euro area partners. What we might have thought of as a plan B, likely has been their plan A all the time.”
“Whether or not this was Syriza’s plan A or whether I am being too suspicious here – Monday will tell.”
Key Quotes
“It is obvious that to set out measures that will satisfy creditors is an breach with most of the program Syriza was elected on and which they have said they will implement. As such it is not easy to set out measures all parties would be happy with. It likely is impossible.”
“That was pretty clear also six weeks ago and I see all that has happened since then as an attempt to gain time – not to comply with the agreement – but to prepare Greece for what is unavoidable in my view – an exit from the Euro area and to replace the euro with a new Drachma.”
“When you devalue a currency – or change it – you should do it during a weekend. Banks are then closed and people restrained from moving funds and withdrawing cash. Banks will go bust because of their liquidity situation and they would have to be nationalized. Bank accounts will be changed from euros to drachma without account holders consent and they likely will have to implement other capital controls.”
“All of this is easier to do and with less of practical problems to the financial system, the central bank and public offices when it happens over a weekend. It leaves businesses and the public trapped but that is the price they pay.”
“The longer the weekend is, the more of practical changes can be implemented before businesses open up again. This is why the Easter weekend is “perfect” and to me it looks like it has been planned ever since Syriza came to power.”
“It explains why their officials don’t stick to deadlines in terms of responding to creditors’ requests – or seem too worried about not securing help from their Euro area partners. What we might have thought of as a plan B, likely has been their plan A all the time.”
“Whether or not this was Syriza’s plan A or whether I am being too suspicious here – Monday will tell.”