While European leaders are trying to find a political solution to the Greek crisis, the ECB chose to leave time to decide on emergency loans to banks, lifeline of the economy.
The European Central Bank said Monday evening a statement that it was maintaining the current level of about 89 billion euros, emergency loans (ELA) to Greek banks, while tightening the conditions for granting.
The guardian of the euro thus leaves the country’s credit institutions in the coma in which he was fallen on June 28, when he decided to leave unchanged the amount of emergency loans, pending the Greek referendum.
The latter ended Sunday with a victory of the camp “no” to fiscal reforms and cuts proposed by Greece’s creditors (EU, IMF, ECB) in exchange for a new bailout.
Private additional liquidity to curb massive withdrawals of their savings by Greeks worried about the situation of the country, the Greek banks were closed on Monday. This measure should be extended until Wednesday.
That day, the Board of Governors decision-making body of the ECB, will again consider the future of emergency lending to Greek banks , told AFP a European banking source who requested anonymity. The ECB declined to comment.
Until then will have taken place a European summit in Brussels, which may shed light on a resolution of the Greek crisis.
The ECB also decided on Monday to increase the discount practiced on securities pledged as collateral by Greek banks to access the ELA -appelés “collateral” -, making more restrictive in the future demand for emergency loans .
“The Governing Council today decided to adjust the haircuts on collateral accepted by the Bank of Greece for the ELA,” she said. Contacted by AFP, she refused to give details of this discount.
According to a source close to the decision told AFP, “the ECB’s decision to raise the discount applied to collateral reflects the deterioration of the situation in Greece “but” it leaves room for maneuver to Greek banks for the future, she did not suffocation. “
” Greek banks can manage these new conditions and the ECB has not posed specific ultimatum to the country “, was within a Greek official, quoted anonymously by Bloomberg
-. Procrastinate –
Several analysts had bet on maintaining the current level of the ELA.
“We expect the ECB to procrastinate by not reducing (loans) ELA but possibly telling European leaders that without a clear political signal, it will soon stop, “Holger Schmieding had predicted economist of Berenberg.
The French President Francois Hollande and German Chancellor Angela Merkel called in unison Monday night in Paris Greek Prime Minister Alexis Tsipras to emergency proposals “precise” and “serious” for the resumption of negotiations with Athens.
Meanwhile a political solution, “is still on the ECB to do the dirty work,” said Carsten Brzeski, economist at ING.
In its role as provider of funds of banks and the Greek economy, it is in an untenable position because the formal conditions for granting ELA are ready to jump: banks are on the brink of insolvency and their guarantees needed to borrow from the central bank are dwindling
-. “Instruments available” –
The implosion of the euro area figure is a foil for the ECB. But for many of its members, to override the rules is also a form of eurozone sabotage.
According to German daily Die Welt of information, the Bank of Greece had asked the ECB to raise the ELA loan ceiling of about 6 billion euros, which was denied.
The ECB, however, reiterated Monday that it stands ready to do more for the euro area if necessary, saying “determined to use all available instruments in the framework of its mandate”.
It could inflate its debt repurchase program giant, called “QE”. Or switch to high gear by engaging the OMT program, never used, who would buy no ceiling on government bonds of countries whose borrowing rates would flame
06.07.2015. 22: 48:15 – Frankfurt (AFP) – By Estelle Peard with Mathilde RICHTER – AFP © 2015
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