The European Central Bank's Governing Council of policy-setters approved increasing emergency funding to Greek banks by 2 billion euros at its weekly review on Wednesday, the biggest rise in recent weeks.
The governors also debated imposing a steeper discount on the security that banks offer for this assistance but held off on any change for now, people familiar with the matter said. That means such a switch will not happen for at least another week.
According to sources, the ECB’s board meeting has not yet reached any decision over a possible higher haircut of collateral used by the Greek banks for funding from ELA. The board could reach a decision later on Wednesday. Sources said that several ECB members supported the view that a decision on the issue should be taken next week.
With this decision, European lenders dashed the government's hopes for a quick cash-for-reforms deal in the coming days, leaving Athens in an increasingly desperate financial position ahead of a major debt payment next week.
Athens managed to scrape together funds to make a 200 million euro interest payment to the IMF on Wednesday, but faces a more daunting 750 million euro repayment on May 12.
Source: Reuters, AMNA
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