The prospect of an agreement between the government and its creditors, following the initial reactions of European officials to the Greek proposals, eased the pressure on local banks on Monday.
The rate of the deposit outflow slowed significantly, with bank officials saying it amounted to just above 500 million euros, whereas on Friday it had come to 1.5 billion euros and it had added up to more than 5 billion last week.
Early on Monday the European Central Bank decided by teleconference to extend the limit of the emergency liquidity assistance (ELA) mechanism by between 1 and 2 billion euros, according to various sources, taking the limit above 87 billion euros, bankers estimate.
Frankfurt will re-examine the liquidity conditions of the Greek credit system in a teleconference on Tuesday and will intervene anew should a need for that arise. It is quite likely that the limit will be increased further.
Senior bank officials said on Monday that this is the first time there has been some concrete progress and there are strong indications that a deal is just a few days away, which in turn should ease citizens’ worries and create the conditions for stability in the system.