The European Central Bank raised the emergency funding it extends to Greek banks on Thursday after Eurozone finance ministers agreed to provide a short-term loan to Greece following the overwhelming approval for tough austerity measures in the national parliament to secure a third bailout.
The Governing Council, which held its policy session in Frankfurt, decided to raise the emergency liquidity assistance ceiling by EUR 900 million for a week after a request by the Bank of Greece, ECB President Mario Draghi said during his customary post-decision press conference.
Several positive conditions were in place for the ECB to raise the emergency funding for Greek banks, Draghi said. However, the central bank's liquidity assistance was never meant to be "unlimited and unconditional", he pointed out.
The latest ECB move may allow Greek banks to reopen and function to a limited extent. The country has had a bank holiday and capital controls since late June. Draghi said it was not possible to say when the capital controls can be lifted and stressed that it was crucial to avoid a bank run.
He also rejected criticism that the ECB did not provide enough cash to Greek banks, calling such accusations "unwarranted" and "unfounded".
Earlier on Thursday, Eurogroup approved an EU-wide EUR 7 billion bridge-loan for Greece during a conference call, the details of which will be revealed later today or on Friday.
Late Wednesday, the Greek parliament approved stringent austerity measures proposed by creditors to secure a EUR 86 billion third bailout for the country.
Finland's Parliament on Thursday approved providing a short-term loan to Greece and asked the government to commence talks over a third bailout for the country, which was agreed by Eurozone leaders on Monday.
Greece has to meet a EUR 3.5 billion bond redemption to the ECB on July 20. Draghi expressed confidence that the country will make the payment. He also said that it was "uncontroversial" that debt relief was "necessary" for Greece.
The ECB has "always acted on the assumption that Greece will remain a member of the euro area", Draghi said, stressing that it remains up to Greece and its eurozone partners to assure the country's membership.
The German parliament is set to vote the Greek bailout proposal on Friday. While Chancellor Angela Merkel had expressed confidence that lawmakers will approve the proposal, German Finance Minister Wolfgang Schaeuble maintains the controversial view that it will be best for Greece to make a voluntary temporary exit from the euro area.
Germany has repeatedly rejected any debt haircut for Greece, but a report from the International Monetary Fund this week warned that the country's debt is unsustainable and it may need massive debt relief. The lender has also called for debt relief for Greece in previous occasions and has been severely critical of the latest bailout deal for the country.
In his introductory statement, Draghi said the ECB's asset purchase programme was proceeding smoothly and it will continue with EUR 60 billion monthly asset purchases until the end of September 2016 or until inflation moves near its target of 'below, but close to 2 percent'.
"Recent developments in financial markets, which partly reflect greater uncertainty, have not changed the Governing Council's assessment of a broadening of the euro area's economic recovery and a gradual increase in inflation rates over the coming years," Draghi said.
"If any factors were to lead to an unwarranted tightening of monetary policy, or if the outlook for price stability were to materially change, the Governing Council would respond to such a situation by using all the instruments available within its mandate," he added.
Citing latest survey data, Draghi said that there was a continuation of the moderate growth trend in the second quarter and the economic recovery is likely to broaden further. Annual HICP inflation is expected to remain low in the months ahead and to rise towards the end of the year.
"Supported by the expected economic recovery, the impact of the lower euro exchange rate and the assumption embedded in oil futures markets of somewhat higher oil prices in the years ahead, inflation rates are expected to pick up further during 2016 and 2017," Draghi said.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.