ECB calls on Greece to agree a strong, sustainable debt pact
European Central Bank President Mario Draghi called on Wednesday for a “strong agreement” with Greece to ensure it stays in the eurozone and also has a sustainable economy.
He said negotiations had not yet reached the point where the ECB could loosen the strings on Greece to allow it to extend issuance of short-term government bills as collateral for ECB liquidity.
“The governing council of the ECB wants Greece to stay in the euro. But there should be a strong agreement, and a strong agreement is one that produces growth, that has social fairness but that is also fiscally sustainable and addresses the remaining sources or factors of financial instability in the financial sector,” he told a news conference.
Greece continues to wrangle with its euro zone backers to lighten the reforms it must make in return for further loans.
In the meantime, its banks, and therefore its wider economy, are dependent on emergency central bank funding, sanctioned by the ECB.
Asked about extending collateral, Draghi said: “There should be a credible perspective for a successful conclusion of the current review. And that would imply by the member countries a disbursement. That would be the condition for the Governing Council to consider, because in any event there is no automaticity for consider a lifting of the T-bills’ threshold. And we are not there.” [Reuters]
