2012-08-09 — www.spiegel.de
The European Central Bank is now taking risky measures to help save Athens from its acute financial emergency. Increasingly, euro-zone leaders are pushing the dirty work on the ECB. In the end, though, they will likely have no choice but to pay Greece the next tranche of its bailout package.
The government in Athens needs to repay a maturing bond worth €3 billion ($3.7 billion) to the ECB by Aug. 20. The solution to that problem seems paradoxical: The ECB itself is pumping money into Greece, so that the country can in turn repay the ECB.
... information has leaked regarding how the ECB plans to keep Greece on its feet until the next tranche of European Union-International Monetary Fund aid is paid out. The ECB has chosen a detour via the Greek central bank. It will allow it to issue additional emergency loans to the country's banks. These in turn are supposed to use the money to buy up Greek bonds with short maturities. This will scrape together €4 billion, according to the plan.
The Greek central bank will accept the dodgy bonds as collateral, and will provide the country's equally troubled commercial banks with freshly printed euros -- which ultimately come from the ECB.
What is particularly absurd is the fact that, for the past two weeks, the ECB has no longer been accepting Greek government bonds as collateral for its refinancing operations. But the Greek central bank -- which in reality is little more than the Athens branch of the ECB -- is still allowed to accept them.
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