The ECB is increasingly concerned by a deteriorating relationship between the Greek government and the country’s central bank, according to sources,
Recent government comments targeting the Bank of Greece have been noted at the Frankfurt-based ECB, which is responsible for monitoring the legally- mandated independence of central banks in the EU. The ECB may issue formal warnings to the Greek government if the situation worsens, the sources said.
The government has accused Bank of Greece governor Yannis Stournaras of attempting to undermine the administration through media leaks as the country negotiates with its creditors to try to avoid a default. The Greek central bank has denied sending an anti-government email to a journalist.
The ECB has intervened in recent cases where members of its Governing Council have complained of bullying from their government. In 2013, ECB president Mario Draghi complained to the government of Cyprus after a spat between Governing Council member Panicos Demetriades and president Nicos Anastasiades. Demetriades later resigned. The ECB is providing a lifeline to Greek banks by approving emergency liquidity assistance to counter deposit withdrawals as the nation’s bailout talks drag on.
The country’s economy fell back into recession in the first quarter, data from the EU’s statistics office showed yesterday. The contraction makes it harder for Prime Minister Alexis Tsipras to meet conditions set by euro-region governments and the IMF for aid payments.
Greece will have to raise at least €3bn to meet the minimum budget targets acceptable to creditors.
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