ECB eases market cash crunch

A decision by the European Central Bank on Wednesday to further extend the cash available to Greek banks paves the way for the credit sector to return to normality as liquidity conditions improve and demands for international corporate transactions are met.

Frankfurt stretched the limit of the emergency liquidity assistance (ELA) to Greek lenders by another 900 million euros to reach almost 91 billion euros, following an increase by the same amount last week.

Senior bank officials told Kathimerini that the new injection of liquidity will allow the local system to more efficiently support corporate requirements for international transactions. The special Banking Transaction Approval Committee will now be in a position to act faster when examining transactions and approve even the kind of high-value payments that it was hesitant to pass before.

Corporate professionals, however, stress that the capital controls imposed by the government and the delays in the processing of demands by the special committee have created major production problems. Unless these problems are dealt with efficiently, they warn, many businesses will find themselves at a dead end, with their continued survival in doubt. The risk remains that in the coming months many companies will have to fold and many more jobs will be lost, aggravating the situation in the economy further this coming winter.

As fas as deposits are concerned, banking sources report a small increase in the last few days, not only due to the very low ceiling of 60 euros per day imposed on withdrawals, but also thanks to deposits made by enterprises. Particularly after banks were reopened on Monday the situation has shown a significant improvement, they add. Banks have seen a flow of clients wanting to pay their loans or utility bills, to deposit checks into their accounts, as well as to have debit cards issued or to activate Internet banking services.