А move to the north or new hopes for Greek business

For three weeks almost 60 thousand  Greek companies have submitted application for re-registration in Bulgaria.

The massive transfer of business from my southern neighbour has begun after the end of June when the government of Greece imposed capital controls and closed banks in the country.

The president of the National Confederation of Hellenic Commerce Vassilios Korkidis commented for the local TV Skai, that the Greek government is unable to manage with the negative consequences of capital controls.

According to him, the committee, which must approve the financing business can not deal with the work.

Today banks in Greece were open, but capital controls remains until the country obtain the needed funding to stabilize the banking sector.

Greek deal led to rise of U.S. stocks and drop of the euro

Saving of Greece led to a sharp drop of the euro, which clearly shows how the investors evaluated the risk of keeping the country in the euro zone and the measures imposed by Germany. The agreement that was achieved today does not solve the problem of the Greek debt, but in the best case postpones it.

At the same time this agreement creates a precedent that could be used against other countries from the euro zone  with debt exceeding 100% of their gross domestic product, such as Portugal, Spain and Italy.

For foreign exchange markets Greece remains a risk factor in connection with the monetary union of the euro, although in the short term the stabilization of the situation in the country reduces political and economic risks.

Against this background the indexes in New York are strongly rising. Dow increased with 1.01%, up to 17,940 points. The Nasdaq has a growth of 1.17%,up to 5056 points. S & P 500 rose with 0.84% up to 2094 points.

However, USD is sharply rising and for this contributed the words of the governor of the Fed, Janet Yellen. According to her the US central bank will certainly begin to raise its interest rates before the end of this year.

The euro depreciated by 1.18% up to 1.1024 dollars. DXY increased with 0.71% up to 96.71.

Oxi....and what follows?

The referendum that was held yesterday in Greece surprised with the strong prevail of citizens voted NO. 

Surprisingly, first because preliminary surveys pointed to a moderate parity in the results and, secondly, because after a week of bank holidays and social tensions, which created the impression that the Greek people are beginning to understand the risks associated with exit of Greece from the eurozone and the falling in financial bankruptcy, and hence to economic isolation.

Greek people decided to support the Government of Tsipras during the week in which their country formally fell into bankrupt after failing to pay a debt of 1.5 billion euros to the International Monetary Fund (IMF).

The next huge obligation is to the European Central Bank (ECB) for the ammount of 3.5 billion Euros and the maturity date is July 20 – just after two weeks. It is logical to think that this debt will remain unpaid.

Interestingly, however, is how long will continue the support and the euphoria of the Greek people for Tsipras and confrontational policy against EU and creditors, because in addition to payments to creditors, the government should also provide money for pensions and salaries of state administration which is not small at all. The problem is that much of the process is now irreversible, and many of the bridges between Greece and its creditors were destroyed.

The ambiguity is total. One of the biggest problems is the lack of a process and a plan to guide the exit of Greece from the eurozone, which becomes more realistic scenario.

GREEK BAILOUT FUND

Online campaign for the salvation of Greece and payment of the external debt of the country succeeded in collecting more than 1.3 million euros.

The Greek Bailout Fund in the online financing site Indiegogo collected less that 500 thousand Euro on 1^st of July.

Just for 24 hours the amount was increased by about 700 thousand Euro.

The idea to support Greece in this way is of 29-year-old Londoner, who actually has nothing in common with Greece and its problems. Thom Feeney decided, however, that with the help of many people could help the Greeks.

" All this dithering over Greece is getting boring. European ministers flexing their muscles and posturing over whether they can help the Greek people of not. Why don't we the people just sort it instead?” wrote Tom at Indiegogo.

" €1.6bn is what the Greeks need. It might seem like a lot but it's only just over €3 from each European."

By donating different amounts everyone can get a gift card with the image of Alexis Tsipras, a bottle of ouzo, feta cheese or a holiday for two in Athens.

More information you may find here.

Emergency plan for Greece

The European Union has decided to impose "emergency plan" to save Greece from bankruptcy if the country by the end of this week does not reach agreement with creditors, reports Süddeutsche Zeitung.

Greeks will receive funding under conditions similar to those for Cyprus during the financial crisis in 2013. I.e.  the country will have to give up entirely of financial independence.

Control will be inputted  on capital movements and restructuring of the financial system will be imposed.

If negotiations reach a deadlock, the plan foresees from next week Greek banks to remain closed for several days in order to be prepared for the control of the transactions.

It is possible the amounts that can be withdrawn from ATMs to be limited, as well as the size of electronic payments.

Yesterday was placed a record in amounts withdrawan from Greek banks. Only for а single day were closed deposits for 600 million euros. Comparing to Friday the withdrawn amounts were 2.5 times more.

Money flowing out of Greek banks

Deposits in Greek banks fell by 4.9 billion Euros only in April, reaching its lowest level in more than 10 years, according to the Bank of Greece.

The total volume of savings has shrunk to 133.7 billion Euro, which is a record low since September 2004. Deposits in Greek banks decreased for the seventh consecutive month.

Since the end of November last year to April this year Greeks withdrew 30.6 billion Euros from their accounts. According to the Central Bank the daily outflow from the banksis  between 100 and 500 million Euros.

This reduction in liquidity in the banking sector makes it entirely dependent on funds from the European Central Bank via the mechanism of emergency liquidity assistance / ELA /. 

Last week, the ECB raised the margin of money in ELA to 80.2 bln Euros.