ECB raises emergency funding for Greece

European Central Bank raises ceiling on Greece’s Emergency Liquidity Assistance to €84.1 billion

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

The European Central Bank (ECB) raised the cap on Greece’s Emergency Liquidity Assistance (ELA) by €1.1 billion ($1.23 billion), a banking source told Reuters. This way, the amount which Greek banks can draw from the country’s central bank has increased to €84.1 billion .

Greek banks are currently reliant on a loan programme called ELA, offered by the ECB. The programme aims to provide credit to financial institutions in the eurozone which are solvent, but experience “temporary liquidity problems.”

The ECB has raised the cap gradually, keeping pressure on Athens to reach a deal with its international lenders over reforms required to unlock remaining aid, which is necessary for Greece to avoid bankruptcy. Last week the bank raised the ceiling by €2.3 billion .

After talks over the cash-for-reforms deal was disrupted on Sunday, the Greek banks experienced deposit outflows of about €400 million on Monday. ECB President Mario Draghi said that liquidity will be provided to Greek banks as long as they remain solvent. However, if Greece would fail to repay the €1.6 billion ($1.8 billion) to the International Monetary Fund by June 30, ECB’s emergency funding might also be at risk.

TRTWorld and agencies