Central Banks

Monday, July 6, 2015 - 07:34

ECB Nowoty: Greece 'No' Vote Won't Make ELA Flow Easier-Press


By Johanna Treeck

FRANKFURT (MNI) - European Central Bank Governing Council member Ewald Nowotny said in an interview with Austrian national radio Monday that Greece's 'No' vote will not make central bank liquidity provision to Greek banks any easier.

In a separate interview with news agency APA, Nowotny warned that it is an illusion to think that a third bailout deal for Greece could be agreed within days.

"The ECB has its rules," Nowotny said. "I am convinced that what we have done so far is right and in line with our rules, but this has to be reassessed on each occasion. I fear that the latest developments in Greece unfortunately will not make it any easier."

Nowotny refrained from making any projections on the outcome of the Governing Council's deliberations later Monday. The Council is due to take a decision on its liquidity policies towards Greek banks via a telephone conference during the course of the day.

According to APA, Nowotny described as "illusionary" the Greek government's suggestion that a 'No' vote will strengthen its position in negations allowing for deal within in two days.

"One needs to be clear that this will take some time," Nowotny said, stressing that it's not possible to take "short cuts" on decisions that will see "many billions" potentially lent to Greece.

Nor should Greece expect further aid without reforms, Nowotny suggested in his radio interview, noting that "the referendum does not change economic realities."

Nevertheless, Nowotny in a third interview with CNBC asserted that "we all have an interest that Greece will stay in the euro."

"Of course we know that means a number of actions have to be taken, Greece has in fact applied for a new ESM programme and I think this is the issue that has to be discussed for now in detail," Nowotny said.

--MNI Frankfurt Bureau; tel: +49 69-720-142 ; email: jtreeck@mni-news.com

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