ECB Pressures Greece on Bailout Extension as Finance Ministers Fail to Reach Agreement (FXE)

While Greece and the European Union were said to be in an agreement in principle with respect to the country's bailout program, the European Central Bank (ECB) is also adding a bit of pressure for Greece to extend its bailout or risk losing funding for its banks.

According to Reuters, the ECB's Governing Council held a short-notice teleconference to discuss how long it would be able to keep Greek banks afloat after finance leaders in the EU were unable to come to an agreement on what sort of statement to make about Greece's debt crisis. Talks were said to center around the provision of Emergency Liquidity Assistance (ELA) by the Greek central bank. The ELA was implemented as an expedient when the ECB stopped accepting Greek debt in return for funding.

German chancellor Angela Merkel said Germany would be ready for a compromise, though other ministers are looking for Greece to adhere to budget discipline and reform commitments.

Dutch finance minister Jeroen Dijsselbloem said, We discussed the possibility of an extension ... For some it was clear that this was the preferred option, but we haven’t quite come to that conclusion yet.

Speaking for the first time at an EU summit, Greek prime minister Alexis Tsipras said, I'm very confident that together we can find a mutually viable solution in order to heal the wounds of austerity, to tackle the humanitarian crisis across the EU and bring Europe back to the road of growth and social cohesion.

Greek Finance Minister Yanis Varoufakis said he would like to secure a new rescue deal with the eurozone by September 1st this year. But, between the beginning of March and end of August, Greece will have to repay about €4.7 billion in old International Monetary Foundation (IMF) loans and about €6.6 billion in ECB and central bank-held bonds. The country also will have to make interest payments to private creditors and roll over €13.4 billion of short-term debt.

The CurrencyShares Euro ETF (NYSE: FXE) is trading positive Thursday morning.

You May Also Be Interested In

• EUR/USD could stay on a holding pattern until key US data, analyst says
• Whirlpool (WHR) to cut 1,000 jobs - CFO Jim Peters
• US Dollar set to consolidate, analyst says