ECB to examine funding to Greek banks Thursday: Report
The European Central Bank (ECB) is reportedly expected to discuss whether to extend the emergency funding to banks in debt-ridden Greece later this week.
A source close to the ECB said Tuesday that the bank’s governing council is expected to examine the extension of emergency funding to Greek banks at a meeting on Thursday.
“They will discuss it to review and possibly extend the ELA (emergency liquidity assistance). It should take place on Thursday,” the source told AFP. The ECB has yet to comment on the issue.
The ECB has stopped granting loans to Greek banks as it no longer accepts the country’s sovereign bonds as collateral.
Banks in Greece had previously escaped such a measure under a waiver mechanism, which was revoked after the far-left government of Prime Minister Alexis Tsipras (shown below) took office in January.
The ECB said in the same month that it had suspended the waiver until the Tsipras government reaches an agreement with its international creditors on its disputed bailout program.
ELA is the only mechanism on which the Greek banks can rely, although it is viewed as an expensive refinancing operation.
Over the past weeks, Athens and the EU have been at loggerheads over the country’s bailout loans.
On February 20, a tentative agreement to extend Greece’s bailout program by four months was reached during preparatory talks between Greek Finance Minister Yanis Varoufakis, German Finance Minister Wolfgang Schäuble, International Monetary Fund (IMF) chief, Christine Lagarde, and Eurogroup chairman, Jeroen Dijsselbloem.
The Greek situation was again highlighted as EU finance ministers were meeting in Brussels on Tuesday.
The issue was not on the agenda of the meeting, but Jeroen Dijsselbloem (pictured above), the group’s president and the Dutch finance minister issued fresh warning that Athens must stick to the promises it has made to the EU for carrying out reforms in its financial system.
The ECB governing council decided last week to raise the ELA ceiling to 68.8 billion euros ($73.3 billion) from the previous 68.3 billion euros.
It also decided to monitor the liquidity situation in Greece and hold weekly meetings to discuss the emergency funding to the country.
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