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Greece is facing 3 massive tests of its debt plans today

Mike Bird

Feb. 4, 2015,

piras posterKarl-Ludwig Poggemann, FlickrGreece's Alexis Tsipras, left, is trying to sell his plans for debt restructuring.

Three absolutely crucial meetings for Greece's financial future are taking place Wednesday.

The outcome of pretty much all of them will have to be positive, or at least neutral, for markets to keep taking a positive view of Greece's new plans for restructuring its huge debts.

The first meeting is at the European Central Bank today. A Reuters exclusive yesterday revealed that two Greek banks have tapped the emergency liquidity assistance (ELA) mechanism for €2 billion. That comes from the ECB and the governing council have to assess and approve or deny the assistance every two weeks. They're doing that this morning.

Here's Lloyds' research team on the subject, emphasis ours:

The ECB holds the key to Greece’s survival until the completion of the negotiations through the liquidity provided to Greek banks. Today’s non-rate setting meeting is expected to extend the ELA for another 2 weeks but the post-February situation looks still unclear. As already discussed next week’s EU summit is key and there is a high probability of an extraordinary Eurogroup early next week (the Eurogroup is a summit of all of the eurozone's finance ministers).

Then there's finance minister Yanis Varoufakis' meeting with ECB chief Mario Draghi. Draghi has previously said that the ECB's liquidity assistance is subject to Greece sticking to its bailout agreement, which Varoufakis wants to scrap.

There's a big gap between the official end of the bailout (if it isn't extended) at the end of February, and a full deal on debt, which likely wouldn't come for months (if it comes at all), so it's crucial for the new Greek government that the ECB still acts as a backstop for the country's banks, Varoufakis will likely need Draghi's tentative agreement for that. The new finance minister says he had a "fruitful exchange" with Draghi, but no more detail than that.

Varoufakis has already been making waves in the German media early Wednesday: He told German newspaper Zeit that he's the "finance minister of a bankrupt country".

The headline meeting is between Greek prime minister Alexis Tsipras and EU Commission president Jean Claude Juncker. Tsipras is continuing his tour of Europe in Brussels, and Juncker is the most important person he's met yet in terms of his plans for Greece's debt.

It might be a little bit awkward: Just a few months ago Juncker said if Tsipras was elected it would be a "major risk" for Greece, that he had "not adequately understood what the problems are in Greece".