ECB Reinstates Waiver for Greek State Bonds

The European Central Bank has decided to reinstate the waiver to allow Greek state bonds to be used as collateral in ECB lending, thus allowing Greek banks to get cheaper loans.

ECB said the decision was taken as the council “acknowledges the commitment of the Greek government to implementing current ESM program and expects continued compliance with its conditionality.”
The waiver will take effect on the next MRO settlement date on June 29, the central bank said, adding that inclusion of the country’s bonds in its quantitative easing (QE) program will be examined at a later date.

ECB President Mario Draghi and the bank’s governing council decided the waiver after the European Stability Mechanism decided to disburse 7.5 billion euros of bailout funds towards Greece.

However, the reinstatement of the waiver does not mean that Greek bonds will automatically be eligible for the Quantitative Easing program (QE), since a debt sustainability analysis must be conducted first.

The ECB chief on Tuesday addressed the European Parliament’s Economic Affairs Committee, where he said that the situation in Greece will continue to improve and stabilize and underlined that the new legislation on non-performing loans is crucial, as it will allow banks to manage them better. He further explained that this will help restore confidence in the Greek banking system and lead to the lifting of capital controls.


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