19:04 GMT +306 December 2019
Listen Live
    Central bank of Greece

    Greek Central Bank to Provide Emergency Lending as Election Looms

    © Flickr / stanjourdan
    Europe
    Get short URL
    0 44
    Subscribe

    Uncertainty over elections and possible limits on capital as Greece attempts to renegotiate its debt are making the country's banks worried.

    MOSCOW, January 17 (Sputnik) – Greece's central bank asked the European Central Bank to provide it with an emergency credit line as banks fear repercussions from the coming elections, according to Reuters.

    "We have sent a request to the ECB on ELA approval for all four major banks to have a shield for the banking system," a Greek central bank official told Reuters.

    The banks fear that the expected election of the far-left Syriza party, which will be looking to renegotiate the terms of Greece's bailout, could make it difficult for banks to maintain liquidity, according to the New York Times.

    Political uncertainty ahead of elections led to people making mass withdrawal from banks in 2012, according to the Financial Times, a trend which could repeat this year.

    Syriza also intends to make it illegal for banks to seize the homes of people who fall behind on  their mortgage payments for residences valued at less than 300,000 euros ($350,000) according to the Wall Street Journal.

    International rating agency Fitch warned, however, that "early elections to be held on 25 January have made the direction of Greek policymaking more uncertain" and that a possible "prolonged political deadlock" in Greece "would increase the risk of financing difficulties and a return to recession."

    Greece decided to hold snap parliamentary elections on January 25 after the country's parliament failed to elect a president in the third and final round of voting on December 29, 2014, and was subsequently dissolved.

    Related:

    Greece Should Stay in EU, Change Certain Policies: Democratic Left Leader
    Eurogroup to Continue Cooperation With Greece After Elections
    Greek Prime Minister Calls for Snap Parliamentary Elections on January 25
    Tags:
    banking, loan, elections, The European Central Bank (ECB), Europe, EU, Greece
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik