If the option of a new bailout through the ESM gets a go-ahead, the best predictions of actual cash disbursements are mid-to end August, way too late to stop Greece defaulting big time on the €3.5bn in bonds it must redeem at the ECB on July 20.
But given a modicum of goodwill, something so far in very short supply (although the general temper today has been a lot better than when Yanis Varoufakis was doing the rounds), there is a fix available to the ECB problem.
When Greece’s 2nd bailout expired last Tuesday, some €3.3bn in ECB profits from its securities markets programme due to Greece also vanished [that’s money that the ECB made from bailing Greece out].
For 2014 the profits amounted to €1.85bn. These are held in an ESM account and could be released to the Greeks if the eurogroup so decided. There is also a further €1.5bn currently held by eurozone governments. This money could also be released to the Greeks -- meaning the ECB problem is effectively solved.
A eurozone source says:
“It’s not an easy solution, but probably the only solution,”
The advantage here is that this money could be released without having to wait for any tiresome parliamentary procedures. But the fly in the ointment here is that both wads of cash need to be authorised by the eurogroup unanimously, meaning that a single country could veto the whole show.
The German finance ministry, for example, has been sending negative signals on this, indeed it has been demanding back €500m of the money held by the ESM, the 2014 profits.
Tanden OK, Gala.