ECB Decision to Depend on Political Talks

The European Central Bank will decide after next week’s meeting of euro region finance ministers whether to tighten Greek access to emergency liquidity, two people familiar with the matter said.

The ECB is prepared to raise the discount demanded on Greek collateral to a level last seen in 2014 unless the country’s government shows a willingness to compromise in bailout talks, said one of the officials, who spoke on condition of anonymity. An ECB spokesman declined to comment.

The Governing Council’s stance adds pressure on Prime Minister Alexis Tsipras to make progress with creditors at Monday’s meeting of finance ministers in Brussels, or risk watching his country’s banks being pushed deeper into crisis. Such is the rate of deposit withdrawals that ECB officials meeting Wednesday in Frankfurt raised their cap on Emergency Liquidity Assistance by 2 billion euros to 78.9 billion euros, the people said.