Time Is Running out for Greek Bailout

European Central Bank officials are keen on resolving issues with Greece to put the last touches on the bailout concerns. However, time may not be on their side, according to central bank executive board director Benoit Coeure.

The EU forged a pact with Greece last month to extend the rescue program for another four months. Athens was given until next month to specify proposed reforms for implementation and to effectively bring to a close a bailout assessment before the country is given additional assistance.

Greek officials vowed to work together with the European Central Bank, European Commission and International Monetary Fund to facilitate a quick and successful wrapping up.

According to Coeure, a follow-up bargain will be taken up with finance ministers of the euro zone if the review is finished successfully concluded. This will take place if Athens is amenable to this arrangement.

Nonetheless, the ECB official said Greece has to manifest that it is ready to generate growth and reclaim financial autonomy. Right now, Greece needs cash badly because it has been kept out from global markets while international support has been frozen against dropping tax revenues.

Last month, the ECB ceased providing standard lending to Greek commercial banks by rejecting low-rate government bonds as security.

This adds strain to local lenders compelled to obtain emergency liquidity aid from the nation’s central bank.

Coeure mentioned the ECB will recommence regular lending to Greek banks if it finds out the Greek program review will be concluded successfully based on the result of Greek officials negotiations with creditors.

The ECB said it cannot subsidize Greece since this is against the EU law. It will not also permit Greece to increase the limitation on issuance of interim debt so Greek PM Tsipiras can ward off a funding crisis.