His worries that the European Central Bank (ECB) will not provide the usual liquidity it offers to the Greek banks if the Greek bailout program is not complete, expressed earlier today the Greek Finance Minister, Gikas Hardouvelis. The liquidity provided so far to the Greek banks by the ECB has reached a sum of 45 billion euros, he underlined talking at an event sponsored by the Greek-German Chamber of Commerce and Industry.
Hardouvelis argued that if the country’s next government collides with the Troika, there is a high risk of Greek banks having to resort to the Bank of Greece’s (BoG) Emergency Liquidity Assistance (ELA), which will definitely cost more. According to Hardouvelis, this additional cost would put further pressure on domestic interest rates for businesses and households alike.
The Greek Finance Minister stressed that the country’s new government must first complete the bailout program review by the end of February in order to avoid the increasing risk of exposure to danger.
In contrast, according to Hardouvelis, if the evaluation is closed, Greece will receive the 7.2-billion-euro installment and will have access to ECB funding. Moreover, the country will enter into a new relationship with its European partners for about a year. “First, the country will determine, along with its European partners, the conditions governing the European preventive support mechanism, the ECCL (Enhanced Conditions Credit Line),” Hardouvelis said regarding this new era. The credit line amount is expected to reach almost 10 billion euros.