ECB May Deny Greek Banks More Emergency Funding
by Stephen Lendman
Despite overwhelming Greek parliamentary capitulation to all Troika demands, Bloomberg
reports the ECB's Governing Council will likely keep its Emergency Liquidity Assistance (ELA) to Greek banks near bankruptcy capped at 88.6 billion euros ($96.8 billion).
An unnamed informed source said the ECB's Executive Board recommended maintaining the present limit for now. Greece's central bank requested an emergency 1.5 billion euro increase - apparently not forthcoming.
On Thursday, the ECB's Governing Council is meeting as this is written. President Mario Draghi is expected to provide updated information at a mid-afternoon press conference, Frankfurt time.
A Greek ELA freeze has been in effect since June 28. Its banks remain closed. Capital controls have been in place for over two weeks - the longer status quo conditions remain, the greater Greek debt mounts, increasing by 10 billion euros daily.
Meanwhile, Greece's economy continues cratering toward collapsing altogether. Earlier, Greek industry groups said nearly 60 Greek companies shut down daily since January 1 - costing over 600 jobs and 22 million euros in GDP every 24 hours.
With banks closed and capital controls imposed, greater numbers are affected - a relentless downward cycle to oblivion.
The ECB apparently wants a 3.5 billion euro bond payment due July 20 repaid before approving more ELA - impossible if Greece has no money to pay it.
On June 30, it was unable to make a $1.8 billion IMF payment - the first time a developed country ever defaulted.
Despite Greek parliamentarians approving harsh Troika terms, talks to approve bailout funding haven't begun. Germany (the key Eurozone country) and the Netherlands haven't yet gotten parliamentary approval to proceed.
Athens desperately needs short-term emergency funding to get through an interim period until bailout details are finalized.
The day after a tumultuous night, things are very much unsettled. For how long remains to be seen.
Stephen Lendman lives in Chicago. He can be reached at email@example.com.
His new book as editor and contributor is titled "Flashpoint in Ukraine: US Drive for Hegemony Risks WW III."
Visit his blog site at sjlendman.blogspot.com.
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