Speaking to reporters in Milan, Bonnici said the value of collateral which Greek banks must offer in exchange for Emergency Liquidity Assistance (ELA) “will depend on Greece’s decision” in the referendum. Greek voters are due to vote July 5 on whether to accept a recent proposal by the institutions overseeing the country’s now-expired bailout-the ECB, International Monetary Fund and European Commission-or reject it as the left-wing government has urged.
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Vitor Constancio said the vote’s only relevance was if made an agreement on financial assistance more likely.
“If the result will be a “Yes”, then it’s the opposite: it seems it will be easier to reach an agreement”, he said.
The bank is “ready to intervene as and when necessary”, the source said, adding that “no other decision was taken” at the ECB meeting.
Both institutions have declined to comment, at a time when the development in Greece carry risks to Bulgaria’s trade also to the banking system, where almost a third of assets are held by Greek lenders. “The liquidity cushion we have is about 1 billion”. One Greek bank is contemplating withdrawing at least 30 percent of deposit accounts with balances as low as €8,000 Euros.
Analysts say it would be hard for the European Central Bank to keep ELA going if Greece defaulted on this payment.
A public referendum is set for Sunday, as citizens can now only collect €60 daily.
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Greek banking representatives were not immediately reachable to verify the report.
