Greece gets new liquidity boost ahead of key vote

  • AP, Athens
  • Updated: Jul 23, 2015 00:46 IST
Greek Prime Minister Alexis Tsipras (R) with head of the Greek bank association Louka Katseli (C) and members of the association’s board at his office in Athens, on Wednesday. (Reuters)

Greece’s liquidity-starved banks got a new cash injection from the European Central Bank on Wednesday, hours before a key vote in parliament on further economic reforms demanded by international creditors in return for a third bailout.

A European banking official said the ECB has decided to increase emergency liquidity to Greek banks by 900 million euros ($980 million) — the second such cash injection in just under a week.

Fearing a run by depositors flocking to take their savings out of Greek banks, the government imposed capital controls more than three weeks ago, restricting daily withdrawals to 60 euros ($65) per account holder. Extra ECB liquidity means that Greek banks will still be able to hand out cash.

Prime Minister Alexis Tsipras’ radical left-led government faced its second crunch test in parliament in a week later on Wednesday. Failure to pass the economic measures could undermine his coalition and trigger fresh fears over the country’s future in the shared euro currency.

The vote on changes to Greece’s judicial and banking sectors is one of the requirements that Greece’s European creditors have insisted upon in order for negotiations on a third bailout for Greece worth around 85 billion euros ($93 billion) to begin.

After losing the support of a large chunk of his own party’s lawmakers during a vote last week on a creditor-demanded austerity measures, Tsipras has to rely on support from pro-European opposition parties to pass measures.

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