Galery

1

Anastasia Balezdrova

The European Central Bank has increased the Emergency Liquidity Assistance ceiling for Greek banks, global news agencies reported. For the first time, however, Frankfurt has not officially announced the amount by which the limit has been increased. According to unconfirmed sources, it is 2 billion euro or 1 billion less than the 3 billion euro requested by the Bank of Greece yesterday. It is significant that the Bank of Greece has not confirmed the information disseminated by the media that it had requested the allocation of the specific amount.

The Governing Council of the European Central Bank decided to increase the limit at an extraordinary teleconference meeting that took place earlier today, following yesterday's failed meeting of the Eurogroup, and in conditions of increased withdrawal of deposits from Greek banks.

According to sources cited by Reuters, the euro zone central bankers will meet on Monday to review the liquidity status of Greek banks. In all cases, commentators point out that the Emergency Liquidity Assistance is close to the limit of its "saving cushion" that has already amounted to 86.1 billion euro. Greek banks obtained the previous emergency funding just two days ago and it amounted to 1.1 billion euro.

Earlier today, Governor of the Bank of Greece Yiannis Stournaras said that the Greek banking system was stable. His statement aimed at suppressing deposit flight that has been continuously increasing since the beginning of the week.

The Greek analysts say today's decision of the European Central Bank will ease the situation just for the coming days. GRReporter sought the comment of economic analyst Kostis Lympouridis, who said the following:

"The European Central Bank continues to support the Greek banking system. The coalition government of SYRIZA and Independent Greeks has increased the uncertainty with its actions over the past few months, which has led to a decline in deposits in Greek banks. The European Central Bank was constantly increasing the sums allocated from the Emergency Liquidity Assistance ELA.

The total amount is more than 85 billion euro already. It is clear that the European Central Bank does not want to take political decisions. It is supporting the Greek banking system while the country is in the bailout programme, leaving the politicians to decide whether this support will continue over time and under what conditions. This tactic is in favour of the conditional independence of banks from the state that may be able to pay its obligations in the coming days."

Until today, the Eurosystem funding of Greek banks has totalled 118 billion euro, which is equivalent to 66% of Greece’s gross domestic product. By comparison, in the critical period May-June 2012, the Eurosystem funding amounted to 135 billion euro but the calculations at that time were based on a large number of deposits, different gross domestic products and different numbers of serviced loans.