European Central Bank (ECB) Executive Board member Benoit Coeure told the influential daily Frankfurter Allgemeine Sonntagszeitung that the ECB rejects the Greek government’s recent request to issue more short-term debt (via T-bills) because this would be tantamount to illegally financing Greece.
The ECB ceiling for T-bill issuance is 15 billion euros, which the country has already reached.
His comments echo those of ECB President Mario Draghi, who said on Thursday that the ECB would resume normal lending to Greece’s systemic banks only when it sees that Athens is complying with its bailout program.
“The ECB cannot finance the Greek government,” said Coeure. “We’re not allowed to do that. That is illegal.” He added that in the current situation, in which Greece has no access to international lenders, accepting more T-bills as collateral would also be a violation of the ECB’s treaty.
