ECB Raises Emergency Lending to Greek Banks by $984 Million
Decision comes two days after a Greek bond redemption averted a default
The European Central Bank on Wednesday raised the ceiling on emergency lending to Greek banks by €900 million ($980 million), a person familiar with the matter said, the second-straight rise by that amount.
The move increases a lifeline, albeit only modestly, for Greek banks that had been frozen from late June into mid-July at the height of negotiations between Greece and its international creditors over a bailout package.
The increase approved Wednesday brings to more than €90 billion the total amount of lending to Greek banks through the Emergency Liquidity Assistance program, or ELA. The program is run through Greece’s central bank subject to approval by the ECB’s governing council.
The decision came two days after Athens paid the ECB €4.2 billion to redeem bonds held at the central bank, plus interest. That averted a potentially disastrous default that could have forced the ECB to curtail or cut off funding.
Commenting last Thursday on the ECB’s decision to restart new ELA loans after a nearly three-week freeze, ECB President Mario Draghi said, “Several positive things have happened that would justify the increase in ELA that we approved” on July 16.
The Greek parliament is due to vote Wednesday on a second round of economic reforms that its creditors have insisted on as a condition for aid.
Source: WSJ – ECB Raises Emergency Lending to Greek Banks by $984 Million
