Can banks do more to help Greece?
It's another messy morning in the turbulent new history of the eurozone.
At 4.42am, the Greek finance minister issued the following intriguing statement:
"Greece's position within the euro area is a historic conquest of the country that cannot be put in doubt. This acquis by the Greek people cannot depend on a referendum.
The country must feel safe and stable and that is the first requirement in order for it to be truly safe and stable. Greek banks are totally secure, as an integral part of the European banking system. This was apparent last night from the discussion in Cannes."
That looks like a warning to Greek people that any savings they have not yet withdrawn from Greek banks (and a lot of money has already been taken out of the Greek banking system) would be put at risk by a vote against the eurozone bailout package: a no vote would be seen as a vote to leave the eurozone, as Angela Merkel has (helpfully?) pointed out, and the Greek government would not be able to guarantee the viability of Greek banks in those momentous circumstances.
Mr Venizelos may be trying to explain to his compatriots why they should think carefully before rejecting the recently agreed combination of financial support from the eurozone and budget-squeeze. But he may also be giving them a reason to withdraw whatever money they have left in local banks, which could turn a fragile banking system into something worse.
All that said, those who think the eurozone could have done more to reduce the crippling burden of debt on Greece may feel that the big French bank BNP Paribas has reinforced that view. Because BNP Paribas has today written down the value of its loans to the Greek government - its holdings of Greek government bonds - by 60%, a full 10 percentage points more than the reduction in repayments by Greece agreed last week by the banks as a collective.
Or to put it another way, BNP Paribas - one of the biggest lenders to Greece and to other highly indebted eurozone countries - appears to have corroborated the view of the German government that banks could afford to take 60% writeoffs.
The point is that BNP Paribas looks in better shape than many investors have feared. And, most germanely, it has generated a profit in spite of incurring a €2.1bn loss from this 60% write down of the value of its holdings of Greek government bonds.
It is the colossal debt weighing on the Greek government that makes it so hard for the Greek economy to recover. So BNP Paribas' admission that it can afford a bigger write-off, only days after the apocalyptic warnings from the banks' negotiating body, the IIF, about the potential harm of asking the banks to do more than 50%, may be incendiary.
Update 09:20: By the way, the Greek finance ministry may have mistranslated one part of Mr Venizelos's statement.
The official statement that "Greece's position within the euro area is a historic conquest of the country" would probably be better rendered as "Greece's position within the euro area is a historic victory by the country".
That said, some disgruntled Greeks would probably agree with the idea that their country has been conquered.
Update 14:50: In response to my post, BNP Paribas tells me that the bank's decision to write down its Greek government loans by 60% is consistent with last week's non-binding agreement by banks to be repaid only half what they're owed.
An BNP official said: "The 60% is basically the 50% agreed last week plus a buffer for technical accounting purposes."
Which is intriguing.
Also BNP's chief executive, Badouin Prot, said today that if the deal to write down bank debts by 50% were to collapse, the banks would then have no incentive to renegotiate a consensual debt reduction and a default would follow.