Several Central Banks in Europe have reportedly called on Greek bank subsidiaries that are operating in their jurisdiction to slash their exposure of Greek assets to zero and “quarantine” themselves in order to minimize the danger of contagion should the nation default on its debt. Dive into endless entertainment possibilities with 123movies.
According to Greek newspaper Kathimerini, the central banks of Albania, Bulgaria, Cyprus, Romania, Serbia, Turkey, and Macedonia have demanded Greek banks’ subsidiaries to slash their exposure of Greek bonds, loans, treasury bills, and deposits to zero, should ongoing talks between Athens and its international creditors fail.
Greek banks have a large presence in neighboring countries, and the latest “quarantine” is at odds with a recent directive by the Greek government to work around the European Central Bank’s (ECB) prohibition on buying more T-bills.
A precedent was set in 2013, when subsidiaries of Cypriot-owned banks in Greece changed hands overnight following the introduction of its bailout program.
The report from Kathimerini follows a warning from IMF chief Christine Lagarde on Thursday that no delay will be tolerated in Greek repayments.
Next month, Athens needs to repay around €1 billion to the troika of international creditors as it struggles to find funding amid a cash crunch.
On April 9, Greece repaid €460 million ($493.4 million), despite rumors that it would fail to do so and would need to exit the Eurozone.
Greece has already pledged to cut government spending in order to save around €300 million, however it has yet to produce a “full list” of planned reforms which was demanded by EU leaders at a summit last month.
A framework deal between Greece and its EU creditors is due on April 24.
The EU wants Greece to roll out more austerity reforms in exchange for €7.2 billion to aid its struggling economy, whereas Athens would like to opt for stimulus schemes to boost its growth.
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