ECB’s Liikanen defends decision to cut off funding to Greek banks

The European Central Bank had no choice but to cancel its acceptance of Greek bonds in return for funding after the new government in Athens abandoned its aid-for-reform programme, ECB council member Erkki Liikanen said on Saturday.

“We already communicated in January that the exceptional rule depended on a successful inspection of the reform programme,» Liikanen said in an advanced copy of an interview due to be published in the Sueddeutsche Zeitung on Saturday.

“However we couldn’t assume this. Therefore it was a logical decision. We have to stick to our rules,» he said.

The ECB’s move on Wednesday shifted the burden onto Athens’ central bank to finance its lenders and is seen as raising the pressure on Greece to strike a new reform deal.