It has been said that it is better to remain silent and have people think you are a fool, than to speak and remove all doubt.
The parliamentarian Rachel Makri would have done well to take that advice before she issued a stream of nonsense on a TV panel show today regarding the Emergency Liquidity Assistance mechanism and ECB funding for banks.
Her comments came when the discussion turned to the threat that Greek banks would be cut off from ECB funding in the event that Greece finds itself outside of an international bailout program.
Currently the ECB accepts collateral from Greek banks allowing them continued access to central bank funding despite the country's low sovereign credit rating. However it has warned that it will only continue to do so if Greece is covered by an international support program. In the event that the current program is not extended or replaced after the February 28th deadline, then Greek banks will be shut off from ECB funding. This is widely accepted as fact.
But Ms Makri disagrees. ‘It is not provided for,’ the elected Member of Parliament asserted about the ECB’s capacity to shut off the funding to Greek banks to her dumbstruck counterparts.
She went on to state that, in any event, if necessary, “the emergency ELA will be activated and we will be able to print euros ourselves in the Bank of Greece up to 100 billion euros.”
Emergency Liquidity Assistance is the provision by a Eurozone national central bank of central bank funds to solvent financial institutions facing temporary liquidity problems. Greek banks have used this mechanism from the Bank of Greece in the past. However these are effectively loans with thresholds established by the ECB and not, as Ms Makri seems to believe, a bottomless jar of money.
Rachel Makri was elected to parliament with the rightwing Independent Greeks Party but left the party to become an independent amid a very public falling out. Now she has joined SYRIZA and will be seeking re-election with the leftist opposition party. She has been embroiled in a number of rows and has been accused of self-serving behavior and adopting different positions according to her self-interest. The inclusion in SYRIZA’s lists of candidates was approved by Alexis Tsipras in the face of opposition from within SYRIZA.
The opposition party was presumably hoping to capitalize on Ms Makri’s name recognition and appeal to other pools of voters. However they may be ruing that decision following Ms Makri’s startlingly uninformed comments.
New Democracy was quick to respond to Makri’s bizarre assertions stating, “SYRIZA states from the mouth of the parliamentary candidate Rachel Makri that if liquidity dries up in Greece they will ‘print’ 100 billion euros by themselves.”
“Why don’t they ‘print’ 300 billion and erase the debt as well?” the party asked.
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