The ECB’s governing council — composed of the heads of the eurozone’s national central banks and the top six officials on the central bank’s executive board, including Mario Draghi, the bank president — made the decision on Wednesday.
A waiver that allowed Greek government debt to be used as collateral despite its junk credit rating was set to expire on February 28, if the Syriza-led government carried out its threat to leave its EU bailout programme. The rules come into force when the ECB’s main liquidity auction next matures, on February 11.
The ECB said the early suspension was “in line with existing eurosystem rules, since it is currently not possible to assume a successful conclusion of the programme review”.
The ban also covers Greek government-guaranteed bank debt, an important source of collateral for the country’s lenders.
The early ban signals the ECB’s determination to take a tough line on Athens’ attempts to secure funding from the central bank for the three-month period between the exit of the bailout programme and the agreement of a new “contract” with eurozone leaders, which Yanis Varoufakis, Greece’s finance minister, hopes to have in place by the beginning of June.
The move follows a meeting between Mr Varoufakis and Mr Draghi in Frankfurt on Wednesday.
Responding to the decision late on Wednesday, the Greek finance ministry said the move would “put pressure on the EU to conclude a mutually beneficial agreement between Greece and its partners”.
The ECB announcement had an immediate effect on markets, with the euro falling 0.8 per cent to $1.1366 and US stocks giving up gains in the final minutes of trading.
© Financial Times
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