The failure of the negotiations between Greece and the Eurogroup opens a week of passion both for Athens, which is preparing for next Sunday's popular referendum on the European plan, and for the financial markets. It's all too easy to predict that tomorrow strong turbulence is coming for the Stock Exchanges, for bonds and for the euro.
Once again it will be up to SuperMario Draghi's ECB to perform the miracle of reducing, as far as possible, the risks of Greek contagion and to prevent both the financial markets and Athens from plunging into chaos. An extraordinary meeting of the Council of Governors of the central banks of the ECB will be held today under the leadership of Draghi.
What can the president of the ECB do when the markets reopen tomorrow? Probably to keep the situation under control and fend off the foreseeable speculative offensive, the ECB president will leverage Quantitative easing, accentuating and accelerating the purchase of government bonds of the peripheral countries of the Eurozone, starting with Italy, Spain and from Portugal to counterbalance the sale of these bonds by those who have an interest in speculating on the emergency triggered by the failure of the negotiations between Athens and its creditors.
It is more difficult to understand what Draghi will now be able to do to avoid the collapse of Athens because the margins of action are very narrow. Emergency funding (Ela) from the ECB to Greek banks will continue until Tuesday, but this is only possible in the presence of an agreed aid program that will end on June 30th. by breaking the bank with the referendum, Greece has precluded the possibility of receiving new aid (the creditors were willing to grant another 15 billion euros in exchange for guarantees on the reforms) to honor the payment deadlines and settle the installment of 1,7 .XNUMX billion with the Monetary Fund on Tuesday itself.
Will ELA funding to Greece be suspended completely or limited? This is what we will know in the next few hours.
