In blocking their last relatively normal route of financing, the European Central Bank has further weakened Greek banks which have for years been operating on life support, experts said Thursday.
From February 11, the ECB will no longer allow Greek banks to use government bonds, which are classified as junk, as collateral for its loans.
The move has a knock-on effect on the state, as Greek banks have been the main buyers of the short-term bonds that Athens has been routinely using to cover its running costs.
Greek lenders currently hold about 18 billion euros in government debt securities, according to Frederik Ducrozet, an analyst at the French bank Credit Agricole.
Athens insisted Thursday its banks were financially secure, noting they still had recourse to the ECB's emergency liquidity assistance (ELA) programme, which allows the eurozone's central banks to make emergency loans to troubled commercial banks.
Indeed, the ECB has given the green light to increase the funds available to Greek banks through this scheme to 60 billion euros ($68.5 billion), a banking source told AFP Thursday.
But Platon Monokroussos, an economist at Eurobank, noted that this form of funding was far more expensive.
"ELA constitutes a more expensive source of liquidity for Greek banks," with rates of about 1.55 percent compared to about 0.05 percent on current ECB funds, he said.
Gizem Kara, an analyst at BNP Paribas, said Greek banks called upon five billion euros through the ELA in January.
This figure is dwarfed by that recorded at the height of the Greek crisis in 2012 and 2013, when the Greek banks were drawing 100 billion euros of ELA funds every month.
- What will savers do? -
"The big unknown is the reaction of the Greek people," said Nathalie Janson, an economist at Neoma Business School in the northern French city Reims.
If savers start withdrawing their money from Greek banks in large numbers, it could provoke a run on the banks -- and the lenders could quickly run out of cash.
Dario Perkins, an economist at Lombard Street Research, noted that pension funds had withdrawn five billion euros in December.
"Various Greek officials are talking about 11 billion euros (of outflows) in January but they could be underestimating," he told AFP.
The access to ELA funding could help reassure savers that Greek banks won't run out of funds, however.
Greek Finance Minister Yanis Varoufakis said in Berlin Thursday that his government would do "everything in our power to avoid any default".
Greek banks have been effectively supporting the state since 2010 by buying up its short term debt.
But Jens Bastian, of the German foundation Friedrich-Ebert Stiftung, said they had failed in "their primary mission, which is to provide the real economy with rapid, affordable funds".
He noted that in November 2014, a small to medium-sized German company was able to borrow one million euros over five years at a rate of between 2.5 and 4 percent, while a similar Greek firm would have a rate of 6 to 8.5 percent.
Greece's four main banks -- National Bank, Piraeus Bank, Alpha Bank and Eurobank, which control 90 percent of the market -- have been recapitalised twice since 2013 but remain vulnerable.
Loans which may never be paid back account for a third of their balance sheet, analysts say.
Another problem is the plunging share price of these institutions, which makes it difficult if not impossible to attract the new shareholders that they need.