The European Central Bank has tightened the screws on Greece’s banking system, and by extension its government.
The ECB will no longer accept Greek government bonds to guarantee loans of money to Greek banks. Those loans are needed to keep them solvent.
The bonds are rated as ‘junk’ meaning there is a much greater chance that they will become worthless if the Athens government does not pay back the money it has borrowed.
The financial markets see this as the ECB piling pressure on the new Greek government and on its eurozone lenders to quickly reach an agreement on the debt and bailout.
Analyst Robert Halver with Baader Bank in Germany explained the central bank’s move: “The ECB doesn’t want to become collateral damage, stuck between the Greeks and their desires on one side and EU politics on the other, ending up as creditors without a solution. This is a warning shot across the bows, the ECB sending the clear message: please, find a solution. We are not going to do it for y
