Reuters Nicosia
Greece could not rely on the European Central Bank (ECB) to raise a limit on Athens’ issuance of short-term debt, president Mario Draghi suggested yesterday.
He also said the rules meant the ECB could not buy Greek bonds under its new asset buying programme.
Asked about the short-term debt limit at a news conference following the ECB’s meeting in Cyprus, Draghi said the bank was prohibited by European rules from direct or indirect financing of governments.
Athens is running out of options to fund itself despite striking a deal with the euro zone in February to extend its bailout by four months. Faced with a fall in revenues, it is expected to run out of cash by the March, maybe sooner.
One funding option would be to raise a e15 billion (R197bn) cap on Athens’ issuance of treasury bills, or short-term debt. The cap has already been reached, and the ECB has a veto over lifting it.
The cap is sensitive because Greek banks have used the treasury bills to access central bank funding and then invest in more treasury bills, helping the state cover its short-term needs.