Bloomberg News

Greek ECB Reliance Declined for Second Month in August

October 06, 2011

(Updates with ELA figures in second paragraph.)

Oct. 6 (Bloomberg) -- Greek banks’ reliance on European Central Bank financing declined for a second month in August, the central bank said.

Greek bank use of European Central Bank liquidity fell to 93.1 billion euros (124.9$ billion) in August from 96.3 billion euros the previous month, according to a statement posted on the Athens-based central bank’s website today. The reliance on emergency liquidity assistance, or ELA, was 6.4 billion euros in the month, according to Bloomberg calculations.

Greece has committed to additional measures to secure a second bailout worth 159 billion euros after the European Union- led aid package of 110 billion euros agreed in May 2010 failed to convince investors the country could avoid a default.

The balance of deposits held by businesses and households in Greek banks rose to 188.6 billion euros in August from 187.2 billion euros in July, according to a separate statement from the Bank of Greece today. That was the first rise this year.

Greek Finance Minister Evangelos Venizelos said in August there was a “clear return” of deposits to Greek banks for the first time in 2 1/2 years.

Deposits by homes and businesses have declined 20.9 billion euros since December 2010, or 10 percent, as the economy shrinks under the weight of government-imposed austerity measures agreed in exchange for international financing. The economy is forecast to contract 5.5 percent of gross domestic product this year and 2.5 percent next year, according to the 2012 budget draft.

--Editor: Peter Branton

To contact the reporter on this story: Natalie Weeks in Athens nweeks2@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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