After three weeks of closing, the Greek banks to the brink of financial strangulation, will reopen Monday, July 20. This announcement follows the decision of the European Central Bank (ECB), Thursday, July 16, to raise 900 million euros over a week emergency loan limits granted to Greek banks, their last source of funding.
“We decided today to raise ELA” acronym emergency liquidity assistance, that is to say its financing emergency, explained at a press conference the head of the ECB, Mario Draghi. These financings were capped since the end of June to nearly 89 billion euros. Mario Draghi also said the ECB continued to act on the assumption that Greece “is and will [it] a Eurozone member” .
Read also: Greek banks to the brink
Do not be responsible for a Greek exit from the euro area
The decision of the ECB is based on at least three arguments. First, European leaders on Thursday agreed on an emergency loan of 7 billion euros to Greece. This will enable the country to pay the $ 3.5 billion it owes to the institution on 20 July. “We will be reimbursed and the IMF” , the Italian said at the press conference
Read also:. Greece gets a loan 7 billion euros … to pay off other loans
Then, the adoption on 15 July of austerity measures by the Greek parliament increased the probability that Athens and its partners Europeans agree to a third aid package to the tune of 82 to 86 billion euros. Greek banks should be recapitalized to the tune of 25 billion euros, which keeps the risk of bankruptcy. This is what convinced the ECB to raise the ceiling of its ELA, it reserves to solvent banks
Read also:. The Greek Parliament approved the rescue plan … and now?
bank reopens Monday, July 20
Finally, the ECB does not want, under any circumstances, be responsible for a possible Greek exit from the eurozone. It has already, repeatedly hinted it would help Athens until an agreement with partners would be in sight. Draghi has also hammered during his press conference: “Our mandate assumes that Greece is and will remain a member of the euro area”
<. p> The increase in ELA bring some oxygen to Greek banks. After announcing that banks remain closed until Sunday, July 19, Deputy Finance Minister Dimitris Mardas announced on state television that banks finally will reopen Monday, July 20.
“A Starting Monday, people can go to the counters of banks and do any operation “, the minister said while stressing that the withdrawal limit would remain at 60 euros a day.
Debt relief, a need” indisputable “
The strong man of the Frankfurt institution has also taken a clear position in the wide debate on Greek debt. According to him, it is “indisputable” that debt relief for Greece is necessary – debt burden represents approximately 180% of its GDP. “The question is what is the best form of relief” , has he said at a press conference in Frankfurt.
On Wednesday, the International Monetary Fund (IMF) had put his foot in it, saying the euro zone was to go “much further” than expected to reduce the debt of Greece and might even be forced to erase part . In a report, the Fund ensures that Greek debt is “totally unsustainable” and anticipates that it will approach 200% of GDP in “the next two years” , against about 175% now
Read also:. For the IMF, the Greek debt is not “viable” and should be lightened
On this thorny issue to be borne by the coming weeks discussions between Greece and its creditors, stressed on Thursday Mario Draghi
Read also:. Greece: the reasons behind the IMF ultimatum on debt
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