Greek banks unlikely to get green light for cheap ECB cash this week: sources

TheEuropeanCentralBank /

Reuters — Greek banks are unlikely to regain access to cheap funding from the European Central Bank this week after talks between the Greek government and its creditors hit a snag, sources close to the matter told Reuters.

The ECB’s decision-making body is meeting on Thursday and cash-strapped Greek lenders, which have been relying on expensive ECB emergency funding, had been hoping it would decide to restart accepting Greek government debt as collateral.

This would give Greek banks access to the ECB’s weekly auctions, where banks can borrow at a zero interest rate.

But the left-led government is resisting some of the additional measures asked of it, such as phasing out a top-up benefit to pensioners, which meant a green light by the ECB on June 2 had now become unlikely, the sources said.

One source added the waiver may be reinstated only after euro zone governments give the all-clear to Greece. Euro zone deputy finance ministers are expected to meet again next week to prepare a Eurogroup meeting later in the month, where decisions can be made.

The ECB declined to comment.