ECB President Mario Draghi has confirmed that the central bank left rates unchanged. Besides that, he commented on the ongoing asset-purchase program, as well as liquidity for Greek banks.
The ECB’s asset-purchase scheme is running smoothly, and will keep running until September 2016, or at least until inflation is back on target.
The evidence we’ve received since our last meeting in June has been broadly in line with our assessment of the economic situation, Draghi said.
The ECB has raised Greece’s emergency liquidity limits by €900m. That’s a small increase - it won’t allow capital controls to be lifted, but it should stop the cash machines running out in the next few days.
A soon reopening of Greek banks is a decision for the Greek government, Draghi says. But it is necessary to avoid a bank run, which would leave all the depositors being hit.
Capital controls have protected depositors, who are generally now all “small depositors” - he emphasizes.
Debt relief for Greece is “necessary”, Draghi continues.
"No-one has ever disputed that. But the question is how we do that in our institutional framework," i.e., do we do it through extending repayment dates, rather than up-front haircuts.
When asked what will happen if Greece defaults on the ECB repayment on July 20, Draghi said the deadline will be met, and for the IMF - too. So that is off the table, Draghi replies.
