ECB’s US$3.7b funding cap for Greek banks
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THE European Central Bank yesterday raised the level of emergency funding for Greek banks by an unspecified amount following a request from the Bank of Greece, a Greek bank source said.
“There was no problem with the financing of Greek banks,” the source said, adding that bank governors were expecting a “positive result” at an emergency eurozone leaders summit on Greece on Monday.
According to state agency ANA, the funding cap was raised by 3.3 billion euros (US$3.7 billion).
Greek Prime Minister Alexis Tsipras said yesterday that Greece’s debt crisis is a problem for all of Europe and the European Union faces a choice between showing solidarity with Greece or sticking to austerity policies that lead nowhere.
Tsipras has remained upbeat about getting a cash-for-reforms deal from Greece’s international creditors as the country edges toward default and a possible exit from the eurozone.
“The European Union, which we are part of, should find its way back to its statutory principles: solidarity, democracy, social justice,” Tsipras said in St Petersburg on a two-day visit to Russia. “By sticking to policies of austerity, and policies which harm social cohesion, which aggravate the recession, this is impossible.”
Greeks pulled over 1 billion euros out of their banks in a single day, banking sources said yesterday, as Greece edged closer to default despite assurances from Tsipras the doomsayers are wrong.
The Greek central bank — which has warned that the country’s future in the euro and even the European Union is at risk unless the government strikes a deal with its creditors — tried to calm savers by saying that the banking system remained stable.
Germany, the biggest European contributor to the bailout programs that have kept Greece afloat for the past five years, insisted it still wasn’t too late for Athens to come to terms with its creditors at the EU and International Monetary Fund.
Greece is on course to default on a 1.6 billion euro debt repayment it must make to the IMF in less than two weeks unless the creditors resume funding that was halted last August.
With the leftist-led government refusing to accept the creditors’ demands for more reform and budget cuts, some anxious Greeks have been emptying their bank accounts, fearing that curbs on withdrawals will be imposed under a capital controls regime, as Cyprus did during a crisis in 2013.
Including the billion withdrawn on Thursday, savers have pulled 3 billion euros from Greek banks since talks collapsed at the weekend, the banking sources said.
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