by Jeff
BlackKarl and Stagno Navarra
11:01 PM
EET
March 18,
2015
(Bloomberg)
-- The European Central Bank raised the maximum amount of emergency liquidity
available to Greek lenders by 400 million euros ($435 million), less than the
Greek central bank requested, people familiar with the decision said.
The
increase was approved by the ECB’s Governing Council on Wednesday, the people
said, asking not to be identified as the council meeting was private. Greece
Greek banks
were cut off from regular ECB funding operations in February, forcing them onto
Emergency Liquidity Assistance from the Greek central bank. The Frankfurt-based
ECB has the power to curb ELA and is reviewing it weekly amid concern that
banks will use it to finance the Greek government and so violate European Union
law.
The
increase should take ELA to about 70 billion euros. Policy makers raised the
limit by 600 million euros on March 12, after a boost by 500 million euros to
68.8 billion euros on March 5. Greek banks haven’t used all their ELA and have
a total of about 3 billion euros in liquidity available, one of the people
said.
The newly
elected government could run out of money as soon as this month as it tries to
agree the terms under which euro-area governments will disburse aid payments.
The region’s finance ministers are urging Greece
The country
faces more than 2 billion euros in debt payments on Friday, and government
salaries and pensions must be paid at the end of March.
As bailout
disbursements have ceased, the Greek state covers its cash deficit by rolling
over treasury bills, forcing the country’s banks to make a choice between
participating in liquidity-draining auctions or letting their sovereign
default.
To contact
the reporters on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net;
Karl Stagno Navarra in Valletta
To contact
the editors responsible for this story: Fergal O’Brien at fobrien@bloomberg.net
Paul Gordon, Kevin Costelloe
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