Galery

1

The European Central Bank has increased the liquidity support for Greek banks by 900 million euro whereas the euro zone finance ministers have approved the bridge loan and the three-year bailout programme.

President of the European Central Bank Mario Draghi has announced the decision of the Governing Council to increase the emergency liquidity assistance for Greek banks by 900 million euro for a week. The particular decision fully covers the amount required by the Bank of Greece, as reported by the Greek media.

During the press conference after the meeting, Draghi said that the European Central Bank "has always acted, and continues to act, under the assumption that Greece is, and will remain, in the euro zone."

Responding to the attacks that the European Central Bank had not provided sufficient support for Greek banks Mario Draghi stressed that it had not planned to provide "infinite and unconditional" liquidity under the Emergency Liquidity Assistance ELA.

He added that so far the European Central Bank had poured into the Greek banking system 130 billion euro. This fact makes it "the greatest investor" since private deposits are worth 120 billion euro.

Earlier today, the council of euro zone finance ministers (the Eurogroup) approved a bridge loan of 7 billion euro for Greece. Its duration will be three months and the European Financial Stability Facility will grant it, if approved at tomorrow's meeting of the Economic and Financial Affairs Council ECOFIN that is made up of all 28 EU member states.

In parallel, the finance ministers have approved in general the granting of a 3-year loan from the European Stability Mechanism, on condition that Greece would comply with all its commitments.

The communication issued after the teleconference meeting states that the third bailout programme will be triggered immediately after the successful implementation of the first measures envisaged in the agreement and after a decision issued by the competent authority of the European Stability Mechanism. It is expected that these processes will complete by the end of current week. Immediately afterwards, creditor institutions are responsible to launch negotiations with Greece on the signing of a new Memorandum of economic support.

The euro zone finance ministers have urged the Greek government to vote in parliament the second package of budgetary measures and reforms by 22 July, as stipulated in the agreement reached on Monday and to reform the Greek legislation based on the recommendations of the institutions.

Meanwhile, the European Commission has approved the allocation of 500 million euro from the previous National Strategic Reference Framework and increased the advance payments to Greece under the current programme (2014 to 2020) to provide emergency liquidity to the Greek economy.

The benefit is part of the attempts to activate the sum of 36 billion euro, which is intended for Greece through the Structural Funds and the common agricultural policy, or the so-called "Juncker Plan." It has already been approved, but Greece cannot yet receive funds because of the liquidity problem and the rules of structural funds under which payments on EU funded projects are made in return for available results.

In announcing the benefit for Greece, European Commission President Jean-Claude Juncker said that "Greece has already received more international financing than all of Europe did from the Marshall Plan after World War II." In turn, Vice-President of the European Commission Valdis Dombrovskis underlined that the recovery of the Greek economy could only be achieved through a parallel implementation of the required reforms.