ECB to re-accept Greek government bonds as collateral as collateral

0

The European Central Bank is ready to once again accept Greek government bonds as collateral for loans if the country proceeds with bailout-related reforms, ECB chief Mario Draghi said Wednesday.

European Central Bank
European Central Bank

Greece’s new leftist government has been embroiled in tough bailout negotiations with its eurozone partners.

It finalized this week an extension of the European part of its rescue package, but experts believe it still faces a funding gap in the coming months, with several debt repayments due.

Up until three weeks ago, Greece had enjoyed an ECB waiver that allowed its bonds to be accepted as collateral for loans even though they fell short of rating requirements.

The central bank ended that exemption on February 11, amid uncertainty over whether Greece would continue with its bailout programme and associated reform requirements.

The move forced Greek banks to turn to the ECB’s more expensive emergency liquidity assistance.

“The ECB had no choice other than lifting the waiver,” Draghi said on Wednesday evening in a debate at the European Parliament, noting that a bailout programme has to be in place for the exemption to be granted.

“Having said that, we are ready to reinstate the waiver as soon as the [ECB] Governing Council will decide that the conditions for the successful completion of the programme are in place,” he added.

The bailout extension is expected to be finalized this week, following parliamentary approvals.

GNA

Send your news stories to [email protected] Follow News Ghana on Google News

LEAVE A REPLY

Please enter your comment!
Please enter your name here