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European Central Banks turns up the heat on Greece. Threatens to block access to funding if elections do not go EU’s way

With less than 20 days to go, the European elites are putting on a full court press in order to make sure Greek citizens vote for the guys the EU want in office.

So far it has been Germany shouldering most of the fear mongering warning towards Greek voters. Now the European Central Bank is getting in on the action, warning Greece that failure to vote the way Brussels dictates will mean no more access to central bank funding.

Via eKathimerini…

Greek bank access to European Central Bank funding assumes a successful completion of a bailout program review and a subsequent deal on a follow-up program with EU/IMF lenders, the ECB said on Thursday.

The ECB makes exceptions on the collateral it accepts from Greek banks, allowing them continued access to central bank funding despite the country’s low sovereign credit rating.

“The continuation of the waiver is based on the technical extension of the European Financial Stability Facility program until the end of February 2015 and the existence of an International Monetary Fund program,” an ECB spokesperson said in a statement.

“It is also based on the assumption of a successful conclusion of the current review and an agreement on a follow-up arrangement between the Greek authorities and the European Commission, in liaison with the ECB, and the IMF.

Greek banks have reduced their exposure to funding from the ECB but still depend on the central bank for liquidity.

Via Zerohedge…

Despite stressing time and again that the ECB cannot dictate policy within individual nation states in Europe, Reuters reports Draghi’s henchmen are playing ‘bad cop’ to Germany’s ‘good cop’ for now as they threaten the withdrawal of Greek financial system funding if reforms are not carried out post election. Greek stocks are falling once again (led by the banks) and default risk has soared, with 5Y CDS +250bps at 1555bps.

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References:

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_08/01/2015_546032

http://www.zerohedge.com/news/2015-01-08/greek-default-risk-soars-independent-ecb-dictates-greek-policy-or-else

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