Exclusive – ECB Holds Athens Lifeline Unchanged as Bundesbank Protests

The European Central Bank held a crucial cash lifeline for Greece unchanged on Thursday, a person familiar with the discussion said, as the head of the Bundesbank objected to the way Greek banks are being funded.

ECB policy-setters held the limit on their emergency funding for the banks steady for the second day running, a source familiar with their talks said, having previously increased it steadily over many weeks.

Greece’s central bank may not have asked for an increase, though the country’s lenders have seen their reserves dwindle daily as savers spooked by the prospect of default continue to withdraw cash. It is not clear how much longer they can cope without further hikes in such funding back-up.

The decision raises pressure on the government in Athens as time runs out for it to agree a cash-for-reforms deal with its creditors to avert a default.

It comes as Bundesbank President Jens Weidmann gave his strongest criticism yet of the use of emergency credit to prop up Greece’s banks. Weidmann said those banks should not continue to buy the short-term debt of their government.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.