ATHENS: Greece is facing some tough decisions ahead, with time running dangerously short for its banks and economy, which are on the verge of crumbling. Deposits are shrinking by the day, Moody’s warns that capital controls are edging ever closer and all eyes will be on Wednesday’s crucial meeting of the European Central Bank’s board.
Frankfurt will examine Greek lenders’ liquidity conditions and discuss whether or not to increase the emergency liquidity assistance available to them. Given that the outflow of deposits currently stands at some 250-350 million euros per day, it is certain that banks will require a further rise in the ELA limit, as the safety cushion of available cash is understood to have now fallen below 3 billion euros.
In the last few weeks the ECB has only released enough liquidity to Greek banks to keep them on life support and it is expected to do the same on Wednesday despite pressure by board members who desire a toughening of the stance toward Greece.
Most analysts agree that there will be no surprises this week, will Frankfurt expected to wait for the politicians to provide an end to the drama of the last few months. There should therefore be a small increase to the current ceiling of 80.7 billion euros.
