The provision of European Central Bank emergency liquidity to Greece is “directly correlated” to the health of its banks and will continue as long as the preconditions are met, a top policymaker from Germany’s Bundesbank said on Tuesday.
Bundesbank board member Andreas Dombret declined to say how the ECB should respond if Greece defaulted.
“Clearly the state of the [country] of Greece is very important for the emergency liquidity and also the state of the banks in Greece. There is a direct correlation,” he told a business school audience.
“There are clear rules in the euro system about emergency liquidity assistance and the ECB and the euro system will support Greece as long as Greece fulfills the requirements for that.”