The ECB decision is based on the reluctance of European creditors to offer Greece substantial debt easing, as Athens requests. The central bank has said that debt relief measures are needed before it will consider purchasing Greek bonds.
Greece hopes that in the Thursday meeting of euro zone finance ministers the review of its bailout program will be completed and the next loan tranche of 7.4 billion euros will be disbursed. Athens needs the funds in order to make bond repayments of equal amount that are due in July. At the same time, Athens needs the QE program in order to access international markets.
However, according to the report that cites a source close to the discussions, the extent and wording of debt-relief commitments is unlikely to convince the Governing Council of the ECB to buy Greek bonds.
The ECB, the source told Bloomberg, “won’t factor fiscal consequences into its policy-making decisions and excessive emphasis on QE inclusion would be misguided.”
Furthermore, the quantitative easing program is scheduled to continue until December 2017, with economists saying bond purchases will gradually drop throughout 2018. This would leave little time for purchases of Greek bonds before the program’s end.