The European Central Bank is holding an emergency meeting on Friday morning to discuss whether to pump more funds into Greek banks to prevent a full-blown banking crisis.
The meeting, starting at noon (11am UK time) via conference call, comes after the acrimonious breakdown of talks between finance ministers in Luxembourgon Thursday night raised the prospect of Greece’s exit from the eurozone.
After the talks broke up with a war of words between Greece and its creditors, European leaders agreed to an emergency summit on Monday evening. The timing – just three days before a scheduled summit of all European Union leaders – was determined by fears of a run on the banks.
Greek depositors have withdrawn more than €3.2bn since Monday, including €1.2bn on Thursday, raising fears of a run on the banks.
The ECB warned finance ministers on Thursday that Greek banks may not open on Monday. According to Reuters, when asked whether the banks would be open on Friday ECB executive board member Benoit Coeure said: “Tomorrow yes. Monday I don’t know.”
On Friday morning the ECB’s decision-making governing council will discuss a request from the Bank of Greece for an increase in liquidity to Greek banks. According to newspaper Kathimerini, the Bank of Greece will ask for – and expects to get – €3.5bn (£2.5bn) of assistance via the Emergency Liquidity Assistance (ELA) facility. The request comes just two days after the ECB threw Greece a €1.1bn lifeline in ELA funds.
The talks between finance ministers broke down after barely an hour of discussions on the Greek crisis. Christine Lagarde, the head of the International Monetary Fund, said there was an urgent need for dialogue with adults in the room.
