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Greek gov't extends bank holiday to June 16 as ECB still does not raise ELA for Greek lenders

Xinhua, July 14, 2015 Adjust font size:

Greece's government announced on Monday evening that the bank holiday introduced on June 29 will be extended once again to June 16.

The laconic press release of the Finance Ministry that the banks will remain closed also on Tuesday and Wednesday this week was issued after the European Central Bank's (ECB) Governing Council decided during a teleconference held earlier on Monday to leave the financing cap for Greek banks through the Emergency Liquidity Assistance (ELA) unchanged.

Athens hoped that European partners would immediately release some liquidity assistance to Greece's banking sector after the debt deal was struck during the euro zone summit in Brussels earlier in the day.

However, financial analysts in Athens noted that Greece's creditors and ECB seem to have eventually opted for a wait and see stance and intend to disburse any aid after the Greek parliament has first ratified by Thursday the first set of prior actions under Monday's agreement.

With no liquidity support from ECB, Athens was left with no choice but to extend the bank holiday as well as capital controls. Since June 29 Greek depositors are allowed to withdraw up to 60 euros daily per debit card in a bid to avert the collapse of the banking system which faces a severe liquidity shortage since late June.

In addition to ECB's decision, Monday's Eurogroup talks also ended with no concrete outcome for Greece on bridge financing in coming days to help the debt laden country meet its international financial obligations to ECB and International Monetary Fund in July and August, as euro zone leaders agreed.

Eurogroup chief Jeroen Dijsselbloem said during a press briefing on Monday that the "complex" issue will be examined on Tuesday at by the Euro Working Group first. Endit