Greek deposit outflows slowed to 3 billion euros ($3.2 billion) in March, two people familiar with the matter said, suggesting the European Central Bank will need to keep drip feeding loans as talks on an economic accord sputter.
The outflow brings net withdrawals in four months to about 28 billion euros, cutting the deposit total to about 137 billion euros, the lowest in more than 10 years.
ECB policy makers hold a weekly review on Wednesday of their Emergency Liquidity Assistance, which is keeping Greek lenders afloat, according to two people familiar with the matter who asked not to be named because the talks are private. Last week it made more than 1 billion euros available, raising the limit to just over 71 billion euros.
“Greece is being kept on an incredibly tight leash,” Michala Marcussen, global head of economics at Societe Generale SA, said in a Bloomberg Television interview. It’s “clearly intended to keep Greece under pressure and keep things moving forward in the negotiations.”
With the Greek government running out of cash, Prime Minister Alexis Tsipras is trying to persuade his euro-area creditors to extend more financial support to his country even as he pushes back against their demands for more austerity. The standoff risks leading to a default within weeks and a potential exit from the euro area.
Euro-area finance ministry deputies will hold a teleconference Wednesday to discuss Greece’s proposals for meeting the conditions to release more aid, according to a European official.
Greek bonds fell in Athens, with the three-year note yields rising 82 basis points to 22.1 percent at 5:35 p.m. in Athens. The benchmark stock index climbed 0.4 percent.
European Union President Donald Tusk said he doesn’t expect Greece to receive any aid before the Easter break, but that a deal will probably be struck by the end of April.
“We are not there yet,” European Commission spokeswoman Mina Andreeva said on Tuesday. The deputy group’s call will “allow it to take stock and also allow us to proceed in the best way,” she added. [Bloomberg]