European Central Bank chief Mario Draghi on Thursday said Greece was "not eligible" to benefit from the bank's massive monthly bond purchases after the debt-laden country exits its bailout programme in August.
"We welcome the successful action by the Greek government undertaken so far and we are looking forward to a successful completion of the programme," Draghi told reporters. But "right now Greek government bonds are not eligible for QE, so they need a waiver," he added. In what is called "quantitative easing", the ECB has spent over 2.4 trillion euros ($2.8 trillion) since 2015 buying up government and corporate bonds as part of stimulus efforts designed to push money through the financial system and keep credit flowing.
Greece's stricken banks were re-issued a waiver in 2016 that has allowed them access to cheap ECB credit by offering the government's junk-rated bonds as collateral. But the EU's most indebted nation never met the requirements to take part in the ECB's QE programme. Draghi indicated this was unlikely to change once Greece closes the book on its painful financial rescue on August 20, when the waiver will be automatically scrapped.
Greek banks in need of liquidity will still have access to central bank credit through their National Bank, but at higher rates than those offered by the ECB. Since 2010 Athens has received over 270 billion euros in rescue money spread over three bailouts, which saved it from crashing out of the eurozone.
At his Frankfurt press conference, Draghi shared his condolences with Greece after more than 80 people died in the country's worst wildfires in recent memory. "We are actually witnessing a tragic drama of spectacular proportions in Greece," the Italian banker said. "I just want to express the solidarity and the closeness of the (ECB) governing council members to the Greek people on this occasion."
Comments
Comments are closed.