European Central Bank Lowers ELA for Greece Ahead of Eurogroup



ecbThe European Central Bank (ECB) has lowered the borrowing ceiling to Greek banks by 300 million euros on Thursday.

The Emergency Liquidity Assistance mechanism (ELA) was lowered to 69.1 billion euros on Thursday, the ECB said after accepting a request made by the Bank of Greece (BoG)  to lower the borrowing ceiling, as a result of the stabilization of deposit flows in the private sector.

The decision was taken ahead of Monday’s meeting of Eurozone Finance Ministers who will discuss the progress of the Greek bailout program. Athens hopes that by Monday’s Eurogroup, the negotiating teams of Greece and creditors will reach a staff level agreement.

Eurogroup discussions will focus on the comprehensive package of fiscal reforms and the sustainability of Greece’s public debt.

“Both issues must be discussed in order to conclude the first program review and disburse further financial aid to Greece,” said the official statement issued by the Eurogroup.

The Greek government is anxious to complete the review in order to receive the next 5.7-billion-euro loan tranche ahead of substantial debt repayments in June and July.

According to reports that haven’t been officially confirmed, the government is to table the security fund reforms in parliament to be voted by weekend in order to bring the legislated measures to Monday’s Eurogroup. The measures were to be voted on after Monday’s Eurogroup.

Allegedly, Prime Minister Alexis Tsipras and Finance Minister Euclid Tsakalotos are willing to propose cuts in public sector wages and pensions in order to achieve a timely deal in May.