Draghi: ECB will restart financing Greek economy when conditions are in place
- Written by E.Tsiliopoulos
European Central Bank President Mario Draghi on Thursday said it was not possible at this time for the Bank to accept again Greek bonds as collateral for draining liquidity.
Speaking during a new conference in Nicosia, Draghi said the EU treaty - and in particular the article 123 on monetary funding - prohibited such action. Draghi said the central bank had doubled lending to Greece to 100 billion euros in the last two months - equivalent to 68 percent of the country's Gross Domestic Product and the highest in the eurozone - but noted that ECB could not buy Greek bonds under its new asset-buying programme.
"The ECB is a rule-based institution. It is not a political institution," Draghi said, adding that the ECB wants to restart the financing to the Greek economy provided the conditions are in place. "The conditions are that a process which suggests a successful completion of the review be put in place quickly. That is the condition, and we will certainly welcome such a development," he noted.
He underscored that “the background will be different if there is an agreement-contract in the Eurogroup”.
The ECB increased the ceiling on emergency lending assistance for Greek banks by 500 million euros to 69 billion euros. Draghi also said Greek banks were solvent and had capital levels well above minimum requirements, while he stressed that the 10-billion-euro cushion held by the Financial Stability Fund could be used in case of a negative event.