ECB’s Draghi says governments to decide on use of profits from Greek bonds
The European Central Bank is unlikely to help Greece much further in its bailout because it is prohibited from providing direct aid, ECB President Mario Draghi said on Thursday.
«The ECB is by and large done,» he said told his monthly news conference when asked about what the bank could do for Greece.
The euro zone is grappling to find a formula to make Greek debt sustainable, with Germany and the International Monetary Fund at odds over the need for governments and the ECB to take a «haircut» on Greek bonds they hold to make the numbers add up.
The ECB has refused to take such a hit on its Greek bonds, saying this would be «monetary financing» which it is prohibited
The bank agreed earlier this year to hand over via governments any profits on its Greek bonds made during Greece’s 3-year bailout package — an amount that would add up to roughly 5 billion euros.
But there remains the possibility of handing over profits beyond that timeframe as well in a similar fashion.
The total stands at around 12 to 15 billion euros and would be passed to national central banks, which in turn will pass it
to their governments. They can then pass it to Athens.
“It’s up to the governments to decide whether they want to use these profits for Greece,» he said.