The ECB loosens the Greek vice – Les Echos

The European Central Bank (ECB) took into account a sequence of good news around the Greek cause Thursday to distribute some good points in Athens. The most tangible sign: the increase of 900 million euros in emergency assistance (ELA) granted to Greek banks, which is valid for one week. At the same time, the finance ministers of the eurozone agreed on a bridging loan of EUR 7 billion and the principle of a third financial support plan for a period of three years to Greece, pending that national parliaments are pronounced.

At a press conference, Mario Draghi, the ECB president, vigorously defended the previous measures taken by the Board of Governors since late June to block aid to banks – to almost 89 billion euros – and strengthen the discount on collateral banks, all at a time when prospects for a political agreement with Athens were very compromised. Since then, “many positive things have led us to raise emergency aid” , has he said, against a point. He saluted in passing the “impressive list” of reforms contained in the program adopted Monday by the eurozone to allow the country to return to growth and clean up its finances.

A monetary union “imperfect, fragile”

These reforms being adopted, the question of a Greek debt relief comes immediately after and is also “undisputed” , has hammered the central banker. “ The question is what is the best way to do so while respecting our legal and institutional framework ,” he added. In doing so, Mario Draghi gave the feeling to abound in the direction of the IMF. The agreement with Greece Monday suggests that the repayment period or the rate applicable to the debt could be reviewed, but excludes touching its nominal taboo in Berlin. The return to normal Greek banks will be gradually. Closed on June 28, they could reopen Monday understands Reuters.

One thing is certain, the agreement on the bridge loan for Athens will enable him to pay the bill of 4.2 billion euros due to the Eurosystem July 20. A default could have led to a sharp cutting using ELA. This threat “is eliminated” , assured Mario Draghi. The latter still wielded the carrot for Greek banks if Athens continued to implement the content of the agreement of the euro area on 13 July.

Every effort in this direction improves the quality of government guarantees for bank refinancing. Under certain conditions, they could eventually apply again to the ECB for their refinancing desk. This could also include Greek bonds in the buyback program of public assets, its “QE” launched in March to boost inflation. Still, the Greek crisis showed that the monetary union is “imperfect, fragile and vulnerable” and that “fails to deliver” the expected benefits to member countries, Mario Draghi stressed.