Dear Greek, take the Euronotes and run

I first though this was implausible, but have seen other posts noting that the ECB ‘lifted the waiver’ for Cypriotic bonds in 2012-2013 before shutting Cyprus out, and according to another blog the ECB has used this measure against Greece in 2012 when negotiations got tough. I hope the ECB is not doing another ‘Cyprus’ because then it will have lost all of its credibility and the belief that it negotiates in good faith.

Real-World Economics Review Blog

Update (20:56 CET): Rumor has it that the ECB has 59,5 billion in Emergency Liquidity Assitance available. But, to be credible, it should be willing to provide backing for every single Greek deposit Euro.

The ECB is preparing a ‘Cyprus’ for Greece. So, dear Greek, exchange your deposit money for cash.

1) According to the ECB the European system of central banks still guarantees the 1:1 exchange rate of Greek bank deposit money and Cash. But the Eurosystem is preparing for a ‘Cyprus scenario’, i.e. it wants to have the possibility to renege on its promise of a guaranteed 1:1 exchange rate between Euro notes and Greek deposit money: the first line of funding of Greek banks has been cut loose  (emphasis added)

4 February 2015 – Eligibility of Greek bonds used as collateral in Eurosystem monetary policy operations

  • ECB’s Governing Council lifts current waiver of minimum credit rating requirements…

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