Deal or no deal. Come on down Greece and deal, say the Europeans. More money please, plead the stricken Greek banks. Who will win? Even the maddest supporters of the left-wing Syrzia government need money to live on — and their preferred currency is euros, not the old drachmas. But Reuters reports this morning that the Greek banking system faces another billion euro plus round of cash withdrawals today, and that will need more money from the European Central Bank, where discussions will happen at 8.30am European time (4.30pm today) to assess the financial needs of the Greek banks. That’s why the Financial Times, in describing the banks as a “ticking time bomb” in the Greek crisis, got it in one. The figures are simply bank breaking, according to the paper:
“Domestic resident deposits have already fallen by roughly a fifth to just over 140bn euro in the six months to April, according to the latest Bank of Greece data, and analysts warn this trend has accelerated over the past six weeks. Deposit outflows hit 1bn euro on Thursday alone and about 3bn euro this week, according to two senior Athens-based bankers. As a result, Greek lenders are relying on ECB funding and, in particular, its emergency liquidity assistance scheme, which they have tapped extensively as other sources of cash evaporate.
Reuters reported that notified withdrawals over the weekend totalled 1 billion euros up to last night. Some media in Athens expressed doubt about the continuing “run” on the banks, but more experienced observers say a similar “silent run” (electronically) caused the Northern Rock to implode very quickly in the UK in late 2008 as the GFC intensified. The banks have to be kept alive, if one fails, or staggers, then Greece’s chances of surviving will implode. So is this the final act for Greece this week, or will this production get another run in July? — Glenn Dyer
Psst, China is a problem as well. The trillion-dollar fall (yes, trillion-dollar) in the value of the Shanghai stock market last week (13.3%) was overshadowed by Greece, and underplayed by Australian media with their silly early deadlines on Friday evening. But imagine the damage to global markets if Greece hits the fan and China continues to fall like it did on Friday, with a 6% plus fall in Shanghai and more than 5% in Shenzhen. It was the biggest weekly fall in seven years. That will shake global confidence. Will it help pop the bubble, gently, or spark something else? — Glenn Dyer
Macca’s on a diet. Believe it or not, but MacDonald’s is going on a diet. because for the first time in living memory, it will close more outlets in the US than it opens. That means the group will close more than that 125 new outlets announced earlier this year over the rest of 2015. This is confined to the US, its heartland. In China and Japan it is planning (and has started, so it seems) to close old outlets because of weak sales growth, falling sales or image problems. In fact Macca’s says it will close around 700 outlets around the world this year. But the US move is big news because it seems the new management has decided that the faltering burger giant should have around 14,000 outlets in America, give or take a few dozen (that’s more than twice the number of its main burger rival, Hungry Jacks, but well behind Subway’s 27,0000). This “diet” has been forced on the burger giant by the realities of the changing attitude of US consumers. McDonald’s is discovering the Millennials are more fussy than Gen Xers and are looking for food and drinks that are tastier, fresher, or not as mundane as existing sodas and alcoholic drinks (such as draft beer — craft beer is booming in the US). — Glenn Dyer
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