ATHENS: The European Central Bank is likely to cancel Emergency Liquidity Assistance (ELA) to Greece’s banks on Sunday (today).
According to the BBC, Greece will probably have to “announce a bank holiday on Monday, pending the introduction of capital controls.” The bailout for heavily indebted Greece expires on Tuesday and talks have broken down. Greek banks would find themselves in serious straits as soon as Monday if the ECB went ahead and cut the lifeline, the BBC economics editor says.
Capital controls are restrictions on how much customers can withdraw from banks. Until now, the Greek government has signalled that it does not want to impose such controls.
In recent weeks, Greeks have withdrawn billions of euros from banks, and long queues formed at cashpoints on Saturday, amid fears that banks would not open on Monday. The ECB has been sending emergency funds on a daily basis to the Greek central bank, which then allocates it to the high-street banks.
