ECONOMY

Banks to resort to ELA system

A few days before the state is scheduled to pay dues of about 10 billion euros via withdrawals from the local credit system, none of Greece?s banks has applied to draw cash from the Bank of Greece through emergency liquidity assistance (ELA).

The state must pay 2 billion euros on Friday for interest and another 8 billion on Monday for maturing bonds, which will deprive local banks of the same amount of cash. That makes it certain that banks will ask the central bank to activate ELA.

This mechanism, formed precisely for such cases, has been used in other countries including Ireland, Belgium and Germany. Sources suggest that some local lenders will apply for ELA next Monday or even on Friday.

At the same time, monitoring firm BlackRock has already started to check the local banking system, while Finance Minister Evangelos Venizelos had another meeting with Bank of Greece Governor Giorgos Provopoulos to discuss the state of the country?s banks.