Arab Today, arab today ecb maintains greek bank funding but with tougher terms
Last Updated : GMT 16:15:05
Arab Today, arab today
Arab Today, arab today

ECB maintains Greek bank funding but with tougher terms

Arab Today, arab today

Arab Today, arab today ECB maintains Greek bank funding but with tougher terms

Man withdraws money from an ATM
Frankfurt - AFP

The European Central Bank Monday maintained a key financial lifeline to Greek banks in the wake of Greece's historic referendum but with tougher conditions for liquidity.

In an evening conference call on Greece's cash crisis, the ECB's governing council said it would continue supplying aid but raised the bar for banks to access the funds.

The ECB "decided today to maintain the provision of emergency liquidity assistance (ELA) to Greek banks at the level decided on 26 June 2015 after discussing a proposal from the Bank of Greece," the Frankfurt-based bank said in a statement.

At the same time, the eurozone central bank also noted that ELA can only be provided against sufficient collateral, putting more pressure on the debt-wracked country.

It said Greece's financial situation had hit its banks "since the collateral they use in Emergency Liquidity Assistance relies to a significant extent on government-linked assets".

"In this context, the Governing Council decided today to adjust the haircuts on collateral accepted by the Bank of Greece for ELA," the statement said, a move that will make it more difficult to access ELA funds in future.

Germany's Die Welt newspaper reported that Athens had sought to increase its ELA limit by around 6.0 billion euros ($6.6 billion) but that the ECB had held it at roughly 89 billion euros.

Financial markets and analysts had been waiting to learn whether the ECB would continue to provide emergency liquidity to Greek banks and keep the economy afloat after 61 percent of Greeks voted against further austerity measures in Sunday's plebiscite.

Until now, the central bank has agreed to keep Greek banks -- and, by extension, the debt-wracked Greek economy -- on life support via ELA.

But the overwhelming 'No' vote had made it more difficult for the ECB to justify keeping that channel open.

"The ECB's hands are tied by rules," the head of the Austrian central bank, Ewald Nowotny, told Austrian public broadcaster ORF earlier.

"We have to assess the situation each time anew. And I'm afraid that events in Greece have not made it easier for us."

Bloomberg News cited a Greek official, speaking on condition of anonymity, as saying that Greek banks could cope with the new terms, noting the ECB didn't impose a hard deadline on the country.

The ECB will review its decision on Wednesday, a bank source said, the day after an emergency summit of eurozone leaders on the Greek crisis.

- 'Dirty work' -

Analysts had earlier noted the ECB's difficult choices.

"Without a clear prospect of an immediate bailout deal that could prevent a full-scale sovereign default... it is very hard for the ECB to authorise continuing emergency support for Greek banks, let alone to allow an increase in such support," said Berenberg Bank economist Holger Schmieding.

"While politicians in the eurozone are preparing for possible new talks, it is once again up to the ECB to do the dirty work," said ING DiBa economist Carsten Brzeski.

ELA is currently the only source of financing for Greek banks, and therefore the Greek economy. But with Greece's bailout programme now officially expired and in the absence of any new programme, the conditions for its continuation are no longer met.

But analysts believe the ECB will not want to be the one to pull the plug on Greece and force the country out of the single currency.

"As long as eurozone politicians will signal their willingness to negotiate with Athens, the ECB will keep ELA at its current levels," said Brzeski.

Until now, the Frankfurt-based ECB has pulled out all the stops in a bid to prevent a so-called "Grexit" -- or Greek exit from the eurozone.

But some of the ECB governing council members believe that constantly violating the single currency's rules, as Greece is perceived to have done, is just as destructive.

For that reason, the head of the German central bank or Bundesbank, Jens Weidmann, has consistently voted against ELA in recent weeks. A two-thirds majority would be needed on the 25-seat board to shut down ELA.

Deutsche Bank economist George Saravelos predicted that for Greek banks, ELA liquidity was likely to be fully exhausted over the next few days.

That would leave cash machines empty and Greece would no longer be able to finance imported goods via outgoing payments.

The ECB's patience is unlikely to last forever and could run out later this month, when Greece is due to repay 3.5 billion euros in loans to the ECB on July 20.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today ecb maintains greek bank funding but with tougher terms Arab Today, arab today ecb maintains greek bank funding but with tougher terms

 



Arab Today, arab today
Arab Today, arab today Prepares to present her new collection

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today To release new antiques collection

GMT 20:33 2017 Friday ,17 February

To release new antiques collection
Arab Today, arab today Optimism on the front line

GMT 07:24 2017 Monday ,20 February

Optimism on the front line
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Egypt to hold first session of Arab film festival

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 14:04 2017 Tuesday ,14 February

"Lagom" new Swedish concept in interior design

GMT 21:49 2017 Thursday ,16 February

Scientists develop new therapy

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday