The European Central Bank has reportedly increased the funding towards Greek banks to 68.8 billion euros via the Emergency Liquidity Assistance (ELA) support mechanism.
The ECB’s board of directors, which is currently convening in Cyprus, decided to increase Greek funding by 500 million euros since the outflow from Greek banks when the Eurogroup agreement was signed. Official statistics show that the deposits in Greek banks dropped by 16 billion euros between December 2014 and January 2015.
While there are no statistics available for February 2015, it is estimated that about 6 billion euros were taken out of Greek banks, with some fearing that the div could be even higher.
According to the general director of a systemic banking group, it will take a long time for those deposits to return to Greece. The director further explained that should the media not focus on the possibility of a falling out with Europe and provided the government comes to an agreement at the end of the four-month extension it recently received, then bank accounts may increase by 3 to 5 billion euros by the summer.
This, however, will necessitate the implementation of the reforms to which the Greek government committed to in the recent Eurogroup. The directors further added that bank account reserves may increase to 150 billion euros within the next 2-3 years, should the Greek authorities provide the necessary political assurances and avoid a new conflict with its creditors.
