ECB to Meet on ELA Funding for Greece

The Bank of Greece is holding a conference call with the Greek banks to discuss their dire liquidity situation, caused by Greeks pulling their money out of the banks. Financial institutions had been helped out by the European Central Bank (ECB) via an emergency liquidity fund known as the ELA. However, after Greece went into arrears on its repayments to the International Monetary Fund (IMF), this was capped.

The banks are now in serious danger of running out of cash in ATMs if the ceiling for the ELA is not raised further—and this could also mean that there is not enough money to pay for key imported goods like medicines.

The ECB will meet to decide what to do with the ELA funding for Greece. If they suspend it, it would mean that Greek banks suddenly have to repay their ELA liquidity, which could mean that Greece crashes out of the euro zone.