Euro central banks lent €110bn to Greek banks

GMT 12:06 2015 Monday ,20 April

Arab Today, arab today Euro central banks lent €110bn to Greek banks

A derlict building adorned
Paris - AFP

European central banks have lent 110 billion euros to Greek banks, the head of France's monetary authority said in comments published Monday, warning that any move by Athens to leave the eurozone would be "traumatic."

Concern is mounting that Greece, which urgently needs new financing to pay salaries at the end of the month and its creditors, could default on its huge debt and potentially exit the single currency bloc.

The country wants the last tranche of its bailout funding worth 7.2 billion euros ($7.7 billion) but has balked at tough reform conditions demanded by its creditors in exchange. Negotiations are ongoing.

In an interview with Le Figaro daily, Christian Noyer, head of France's central bank, said the level of funding of the Greek economy by the Eurosystem -- the eurozone's monetary authority -- was "by far the biggest in the eurozone".

"We are currently at 110 billion euros and we have more than doubled liquidity contributions in six months."

Noyer added that the amount of emergency liquidity accorded to Greece has increased considerably, and urged Greece to "very quickly make a complete proposal of reforms that would allow them to find a viable economic model".

A Greek exit from the eurozone would be "traumatic," said the French central banker.

"The shock would carry wider risks, and the entire global economy would be affected, as it is after any strong jolt.

"But... the most dramatic consequences would be for Greece, which would experience a major economic crisis without resolving its fundamental problems of growth and unemployment."

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