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Draghi raises Greek bank funding - a bit

Thursday, July 16, 2015 - 02:18

The European Central Bank has raised its emergency funding for Greek banks slightly in a step to help banks partially reopen after euro zone governments agreed in principle to grant Athens a new three-year loan. David Pollard reports.

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EDITORS PLEASE NOTE: EDIT CONTAINS PROFANE GESTURE The ECB meeting was held here in Frankfurt. But it may as well have been held in Athens - the place generating most of the talk. And two key questions: would Draghi extend emergency funding or ELA to Greek banks? And: what risks does he see on the latest bailout deal colllapsing? The first question first. (SOUNDBITE) (ENGLISH) MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK, SAYING: ''Now things have changed, now. We had a series of news, with the approval of the bridge financing package, with the votes, the various votes in various parliaments to begin with in the Greek parliament, which have now restored the conditions for a raise in ELA.'' Before the meeting, activists outside the ECB were demanding more ELA for Greece. A wish granted then - but only just. Greece is to get an increase of 900 million euros for one week - while the ECB sees how thing goes. Draghi already primed for a move - and, who knows, perhaps a bigger one - after last weekend's fraught bailout talks. Says Vicky Pryce of CEBR. (SOUNDBITE) (ENGLISH) CHIEF ECONOMIC ADVISOR, CEBR, VICKY PRYCE SAYING: ''From what we understand, he was ready to raise ELA ... as soon as the discussions finished, and he wasn't allowed to do that. So I think he probably feels the moment can't be too soon before he's able to at least make sure, after all it is his job, that a country which is still in the euro zone isn't allowed to see its banking system collapse.'' Draghi repeated an ECB mantra several times: its mandate is to treat Greece as a member of the euro zone. It was ''uncontroversial'' he said, that debt relief for Athens was necessary. But he's confident that arrears to the IMF, plus a the next debt payment - 3.5 billion euros due next Monday to the ECB - will be paid. There was caution on the issue of how effective the latest bailout deal will be. Though the agreement, he said, was ''specific'' and ''impressive''. (SOUNDBITE) (ENGLISH) MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK, SAYING: ''Let me say that the overall purpose of that document is to ensure that Greece will become a thriving economy in the euro area. A quite considerable space in that document was even to structural reforms.'' On the other business of the day, rates and QE were left on hold. One analyst noting that, without Greece, the ECB would-be enjoying a gradual return to euro zone growth. Greece though - it dominated this meeting, and could do so many more to come.

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Draghi raises Greek bank funding - a bit

Thursday, July 16, 2015 - 02:18