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A file photo of Greek prime minister Alexis Tsipras (Right) and finance minister Yanis Varoufakis. Photo: Reuters
A file photo of Greek prime minister Alexis Tsipras (Right) and finance minister Yanis Varoufakis. Photo: Reuters

Greece pleads cash running out, told to hasten reforms

The Bank of Greece asks ECB to approve an increase of between 800 million and 900 million of ELA, people familiar with the matter said

London/Valletta: Greece probably won’t get all the emergency funds it’s requesting for its banks this week, according to two people familiar with the situation.

The Bank of Greece asked the European Central Bank (ECB) to approve an increase of between €800 million ($860 million) and €900 million of Emergency Liquidity Assistance, the financial lifeline keeping the country’s lenders and the economy afloat, said one of the people. Both asked not to be named because the talks are private.

As ECB officials prepared to hold a conference call to assess Greece’s ELA later on Thursday, Greek Finance minister Yanis Varoufakis criticized central-bank policy makers for keeping the country on a tight leash amid negotiations to release aid from its international bailout package.

“The euro zone is teaching us about the paradox of central-bank independence," Varoufakis said at an event in Paris. “The attempt to ringfence Frankfurt from politics has produced a highly politicized central bank. I do not blame the Governing Council. In their attempt to do some efficient firefighting, they have become politicized."

Greek officials this week said they are targeting an 24 April meeting of euro-area finance ministers as a deadline for approving new money. A looming cash crunch in the summer, when the ECB needs to be repaid, means a new bailout deal will be needed before then.

‘Right direction’

“I am confident that an agreement will be reached by the next Eurogroup meeting," Italian finance minister Pier Carlo Padoan said in an interview in Singapore. “The situation is going in the right direction."

Spokesmen for the ECB and the Bank of Greece declined to comment when contacted about the ELA.

Greek stocks and three-year notes gained after a finance ministry official said on Thursday that the government had met its obligation to pay the International Monetary Fund (IMF) about €450 million. The benchmark equity index added 0.5% at 2:30 pm Athens time. Three-year yields fell 57 basis points to 20.8%.

A meeting of the currency region’s representatives late on Wednesday piled more pressure on the Greek government to start negotiating in earnest if it is serious about obtaining liquidity, according to two European Union officials.

The negotiations on more aid are focused on honing an initial agreement reached in February over reforms including tax collection and maintaining sales of state-owned companies.

European Commission spokesman Margaritis Schinas said that progress was being made and discussions will continue during the Orthodox Easter weekend in Greece. Even so, with many finance chiefs attending IMF meetings in Washington next week, time is running out for Greece to meet its self-imposed target.

“We’re making progress and we foresee more of that in the coming days and weeks in line with the Eurogroup statement of 20 February," Schinas said in Brussels Thursday. “The objective is to have the full list of reform measures specified and then agreed with the institutions by the end of April." Bloomberg

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