ECB holds Greek emergency funds steady as withdrawals slow

GMT 19:53 2015 Wednesday ,27 May

Arab Today, arab today ECB holds Greek emergency funds steady as withdrawals slow

The European Central Bank
Athens - AFP

The European Central Bank on Wednesday left the amount of emergency funds available to Greek banks unchanged at 80.2 billion euros amid signs of slowing depositor withdrawals, a Greek banking source said.

It was only the second time the ECB did not raise the ceiling of its emergency liquidity assistance (ELA) programme for Greek banks since February, when it started a weekly review of the country's crisis-battered lenders.

With withdrawals slowing in recent weeks, Greek banks still have a cushion of about three billion euros in total ELA funds, the source said.

Separately, a Greek government source said the Bank of Greece had not asked for additional support for the nation's lenders.

"The European Central Bank did not raise the ELA because the Bank of Greece did not ask for an increase, as the ceiling of 80.2 billion (euros) is considered sufficient after the stabilisation of deposit outflow," the source said.

One of Greece's top four lenders, Piraeus Bank, on Wednesday said it had lost some eight billion euros in deposits -- 15 percent of its total --  during the first quarter of the year, but added that the outflow had "significantly declined" after Greece and its creditors came to a temporary agreement in February.

The group said it had cut its first-quarter losses to 69 million euros from 247 million a year earlier.

Earlier signs of slowing withdrawal activity led the ECB last week to make the smallest hike -- of 200 million euros ($215 million) -- since the review process began following the election of the radical left Syriza government.

The emergency funding scheme has become the only vehicle of ECB assistance to Greek banks.

According to the Bank of Greece, households and businesses withdrew a total of 26.8 billion euros from Greek banks from December through March.

Figures for April are to be published Friday.

The ECB move comes as Greece and its international creditors struggle to strike a deal to free up 7.2 billion euros in blocked bailout funds that Athens desperately needs to honour a series of debt repayments due in June -- and thereby avoid a default that could possibly lead to a chaotic exit from the euro.


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