ECB rejects three proposals for reopening of exchange
The Athens stock market will remain closed until further notice after the European Central Bank urged an extension of its closure amid fears of capital flight through stock transactions, which would then have to be covered through the emergency liquidity assistance (ELA) facility.
Over the weekend Frankfurt reportedly rejected at least three times proposals submitted by the Greek regulating authorities (the Bank of Greece and the Capital Market Commission) asking for the reopening of the bourse, which has now entered its second month of inactivity.
Sources say that the proposals estimated an outflow of capital of 20 billion euros over the next couple of months if transactions were not regulated. This was deemed by the ECB as a risk to the stability of the Greek credit system, which is still under capital controls.
OnMonday Athens sent a fourth proposal to Frankfurt with the ECB expected to issue its decision on the reopening of the stock market by Tuesday morning. However, it is seen as unlikely that the bourse will open on Tuesday, taking domestic and foreign investors by surprise.
Once the ECB has issued its approval it will take a ministerial decision by Finance Minister Euclid Tsakalotos for the stock market to open after four-and-a-half weeks of closure.
If the bourse does reopen, it is most likely that the stocks of the four systemic banks (National, Alpha, Piraeus and Eurobank) will not be up for trading, and there is also some debate regarding how long daily trading should last in the first few days after it is reopened.
