Keep in mind the Bank of Greece works for Draghi and the ECB, not the best interests of the Greek population.
As one commenter explained on Zerohedge…
The central bank of Greece along with all other central banks in the Eurozone, is just an ECB franchise. They have less authority on what to do or say tan [sic] a McDonalds joint. Just to clarify what the opinion of the Greek central bank is worth
Finally…Zerohedege sums up the Bank of Greece’s statement…
The most dire assessment came from the Bank of Greece, which warned on Wednesday of an “uncontrollable crisis” in the absence of a deal. Here’s more, from the press release:
Failure to reach an agreement would, on the contrary, mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and – most likely – from the European Union. A manageable debt crisis, as the one that we are currently addressing with the help of our partners, would snowball into an uncontrollable crisis, with great risks for the banking system and financial stability. An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring.
All this would imply deep recession, a dramatic decline in income levels, an exponential rise in unemployment and a collapse of all that the Greek economy has achieved over the years of its EU, and especially its euro area, membership. From its position as a core member of Europe, Greece would see itself relegated to the rank of a poor country in the European South.
This is why the Bank of Greece firmly believes that striking an agreement with our partners is a historical imperative that we cannot afford to ignore. From all the evidence available so far, it seems that a compromise has been reached on the main conditions attached to this agreement and that little ground remains to be covered. Besides, the lowering of the primary surplus targets is a decision of paramount importance that significantly extends the time needed for fiscal adjustment and allows for additional degrees of freedom in the conduct of fiscal policy. Equally important will be the reaffirmation and articulation in more specific terms of our partners’ willingness to provide debt relief, as initially stated at the Eurogroup meeting of 27 November 2012. What we need today is a viable debt deal which will spare future generations burdens that we have no right to saddle them with
To get an idea of how far apart the two sides are, consider the following from Tsipras (via Bloomberg):
“Our proposals fully ensure that we meet the budget targets that creditor institutions have set for 2015 and 2016,” Greek PM Alexis Tsipras tells reporters in Athens after meeting Austrian Chancellor Werner Faymann.
Savings of EU1.8b in 2016 alone from pension system aren’t possible; Greek proposals lead to savings of EU300m. There’s no room for additional pension cuts.
“Our proposals fully cover the extent of fiscal consolidation demanded, but Greece is a sovereign state. The Greek government has a recent mandate and it is its own competence to decide how to tax and where will it find themoney. The demand to find the savings asked from pension cuts is incomprehensible.”
“If Europe’s political leaders insist on this incomprehensible demand, they will assume the cost of a development which will not be beneficial for anyone in Europe.”
Government will assume responsibility to say “the big No” if no viable agreement is on the table.
And then of course there’s the incomparable, incorrigible Mr. Schaeuble:
- SCHAEUBLE SAID TO TELL LAWMAKERS PREPARING FOR NO GREECE DEAL
If all of this sounds unequivocally bad to you and if it seems that capital controls and some manner of dramatic political and social upheaval are now an inevitability in Greece, you’re not alone, but because we like to preserve our reputation for staying positive, we’ll leave you with the following reassuring words from Tsipras:
“The real negotiations are starting now.”