ATHENS: Greece banks could need a fresh cash injection as soon as the result of Sunday’s referendum on the nation’s bailout is clear.
With Greece under capital controls and depositors barred from withdrawing more than 60 euros ($67) a day from ATMs, liquidity reserves will probably only last until Monday, according to people familiar with the situation.
That would be just in time for a planned discussion by European Central Bank policy makers to reconsider the level and terms of emergency aid to lenders, the people said, asking not to be named as the matter is private. Authorities may need to consider further restrictions on daily cash withdrawals if they accelerate before the referendum, the people said.
Greece’s vote could effectively decide its future in the euro area, after Prime Minister Alexis Tsipras broke up negotiations with creditors and allowed the country’s European Union bailout program to lapse. The ECB capped Emergency Liquidity Assistance for Greek Banks at 88.6 billion euros last Sunday, after the referendum was announced.
“The Governing Council stands ready to reconsider its decision,” the central bank said in a statement on June 28. “It will work closely with the Bank of Greece to maintain financial stability.”
