ECB Increases Emergency Funding for Greek Banks

Government And Institutions Reuters

The European Central Bank raised the amount of emergency funding for Greece's troubled banks by 2.3 billion euros on Wednesday, banking sources said, as negotiations between Athens and its creditors reached a critical stage.

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The ECB has been raising weekly a cap on the amount that local banks can draw from the Bank of Greece under the Emergency Lending Assistance (ELA) program, following heavy deposit withdrawals by worried savers.

The latest move authorized by the ECB increases the amount available from just 500 million euros last week. It takes the ceiling to 83.0 billion, the banking sources told Reuters on Wednesday.

The ECB has raised the cap in increments, keeping pressure on Athens to strike a deal with its creditors over economic reforms required to unlock remaining aid under Greece's 240 billion-euro bailout program - money it needs to avert bankruptcy.

One of the sources said the banks still had money in hand. "There is an unused liquidity buffer of about 3 billion euros," the source said.

Greece and its European Union and IMF lenders moved closer to the brink on Wednesday, as the leaders of Germany and France put off an expected meeting with Prime Minister Alexis Tsipras to press for more concessions from the Greek side. 

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(Reporting by Lefteris Papadimas and George Georgiopoulos; Editing by Karolina Tagaris and Larry King)