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1st LD Writethru: ECB technocrats prepare to discuss 1.1-tln-euro QE program in Cyprus

Xinhua, March 4, 2015 Adjust font size:

Teams of European Central Bank (ECB) technocrats are gearing up for a governing council session here to discuss its 1.1-trillion-euro (about 1.22 trillion U.S. dollars) quantitative easing program, officials said on Wednesday.

The Central Bank of Cyprus (CBC) sources said the ECB governing council proper session on Thursday would be followed by a press conference by its president, Mario Draghi, on his plan to inject fresh money into the lagging economies of euro zone countries and ECB's interest policies.

The CBC sources said they expected Draghi to announce details, including the program start date for the ECB's purchase of sovereign debt in a bid to combat persisting deflation and high unemployment, now standing at about 11 percent in the euro zone area.

Also up for discussion at the ECB governing council session, is the issue of Greece and the funding of the country's banks, which depend solely on ECB Emergency Liquidity Assistance (ELA) to meet the outflow of capital.

ELA to Greek banks increased to 87.4 billion euros, according to figures announced on Tuesday, from 56 billion euros at the end of 2014.

The ECB technocrats are expected to consider whether the two bailout euro zone countries, Greece and Cyprus, will be considered eligible to benefit from the purchase of sovereign debt.

Both countries lack a positive evaluation of their progress in implementing their respective bailout economic adjustment program.

Greece has said it will discontinue its program and Cyprus is facing increasing difficulties in applying its program because of hostility to austerity measures by opposition parties.

The Cypriot opposition has blocked implementation of legislation regulating repossession of properties by banks for non-performing loans, which is a requirement for more economic assistance.

The issue of Cyprus's eligibility is expected to be discussed when Cypriot President Nicos Anastasiades privately meets Mario Draghi Wednesday night. Endit