The European Central Bank has agreed to pump more funds into Greek banks to prevent a full-blown financial emergency in the eurozone’s crisis state.
The decision – taken at a hastily convened conference call on Friday – comes after the acrimonious breakdown of talks between finance ministers in Luxembourg on Thursday night raised the prospect of Greece’s exit from the single currency bloc.
The ECB’s decision-making governing council on Friday agreed that Greek banks could draw on extra funds from an emergency facility. However, it was unclear whether Greece had got the full €3.5bn (£2.5bn) it was hoping for under the Emergency Liquidity Assistance (ELA) programme, or whether it has been given only enough to see it through until Monday’s meeting of EU leaders.
A spokesman at the ECB declined to comment.
The ECB has set another meeting for Monday, suggesting that the latest cash injection will only see Greece through the weekend.
Monday is shaping up to be a red-letter day in the five-year old Greek debt drama. The ECB meeting will be followed by yet another gathering of eurozone finance ministers in the afternoon, topped by an emergency summit of European leaders scheduled for the evening.
European leaders agreed to the special summit after a meeting between Greece and its eurozone creditors broke up amid recriminations over who was responsible for the impasse. The timing of the emergency leaders’ summit – just three days before a scheduled meeting of all European Union leaders – was determined by fears of a run on Greek banks.
The ECB has warned finance ministers 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.”
