Tsipras-Stournaras meeting in wake of Athens’ QE exclusion

Draghi’s decision and Greek economy funding issue on the table

Greek Prime Minister Alexis Tsipras will meet with Bank of Greece Gov. Yiannis Stournaras within hours to be briefed on ECB decisions taken during a board of directors’ meeting in Nicosia this week.

The meeting comes hours after ECB president Mario Draghi declined a Greek request to raise the limit (15 billion euro, currently) for the issuance of T-bills, in order to cover part of its fiscal needs.

Draghi nevertheless noted that the ECB has given a credit extension to Athens totaling 100 bln euros, and has doubled lending. Lending is 68% of the Greek GDP, he noted, adding that the ECB is Europe’s Central Bank as well as the Central Bank for each individual member state of the Eurozone. He clarified that a prerequisite to restart Greek funding will be the successful implementation of the program. As things stand, no bonds could be bought by countries in a program, such as Greece and Cyprus.

He underlined that if the country repays the bonds in the ECB’s possession, the whole issue can be re-examined.

On Wednesday, following a phone conversation between Tsipras and Stournaras, the Greek PM expressed confidence that the BoG governor will use all the right “tools” to fully restore financing for the Greek economy.