The president of the European Central Bank Mario Draghi urged that Greek government to complete the review of the current program in order to see liquidity restored to the domestic market, in the press conference that followed the ECB board meeting in Nicosia on Thursday.
Mr. Draghi appeared categorically against the possibility of financing Greece and accused Athens for causing volatility in the markets and undermining the credibility of the banking system with its communication policy. Earlier it was announced that the ECB would only increase the ELA towards Greece by 500 million euros and rejected the possibility of allowing the four systemic banks to buy more treasury bills.
The ECB chief stressed that the Bank is a financial institution and not a political body, that its goals is to implement monetary policy and as such it cannot finance States. When asked about the immense pressure applied on Greece, he responded that the funding which Greek banks have so far received amounts to 68% of the GDP, the highest in the Eurozone. He further noted that the ECB has loaned Greek banks 100 billion euros and that lending doubled in the past two months.
In order for Greece to be eligible for the quantitative easing program, Mr. Draghi explained that Greece will have to complete its current review and pay off the bonds that mature in July – thus reducing the rate of titles held by the ECB.
