According to Greek sources, Friday night board meeting resulted in the ECB decision to increase contingency funding for Greek banks to ensure their liquidity. In the past three days the Greeks have withdrawn from banks, savings worth about 2 billion euros, the so-called country is threatened. a run on the banks or a bank panic.
The decision was taken after a teleconference, it is the result of massive withdrawals of Greeks in fear of the collapse of the system. The amount you will receive the banking sector threatened by capital flight will not be made public.
The Greeks are beginning to panic
On the streets of Athens on Friday you could see the anxiety, larger than usual queues in banks and supermarkets. Authorities also reported that it has increased significantly the number of electronic money transfers. – Money flow from Greek banks faster than ever before – told the AP the Greek politician.
The Greek authorities recommend foreign tourists to – just in case – coming to the country took with him the cash – reported the radio “Echo of Moscow”.
At the end of April, after the informal Eurogroup summit in Riga, which like all the previous did not bring any breakthrough in negotiations with Athens, ECB chief Mario Draghi announced, however, that “the ECB will provide emergency help financial (ie. ELA – emergency liquidity assistance) so long as Greek banks are solvent and keep financial reserves “.
Financial drip can end
It is therefore considered that the ECB will separate the financial drip while Greece does not become permanently insolvent. If, however, will not be concluded any agreement quickly, to ensure that Athens will receive financial aid rapidly, the Bank will be under great pressure and it will be urged suspension of aid would not pump money into the banking system, which can collapse – says the AP.
Credit ELA are of fundamental importance for the Greek banking system, whose liquidity is threatened by capital flight caused by the massive withdrawal of deposits. Without this weekly financial drip from the ECB Greek banks in danger of losing liquidity, and Greece re inability to borrow money on the markets.
Greek banks have so far remained solvent through 75.4 billion euros, the ECB has supplied them with ELA program; But – as recently reported a source in the Bank – its management is becoming more critical mood for this loan.
“Run on banks’
How did the AP, a run on the banks is the most serious of the many threats faced by Greece. Therefore, more and more often they speculated that because of how much prolong the negotiations and how far uncertain is the future of the country will panic Greeks withdraw their savings on a large scale, regardless of whether the government reaches agreement with creditors, or not .
Therefore, the government may introduce monitoring of capital flows to prevent Runowo on banks. Especially now that they are in a deplorable state, and according to the latest available data – in April – the level of deposits reached its lowest level in more than a decade.
If Greece does not quickly reaches an agreement with creditors and does not receive aid, immediate danger of insolvency. From the end of June expires rescue program for the country.
Athens must also, within that period to repay another installment loan with the International Monetary Fund – a total of 1.6 billion euros. IMF head Christine Lagarde warned on Friday that Greece will not receive the deferment of repayment up to a month. “Money is payable on June 30,” – she pointed out.
PAP, fko
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