Brussels, 02/06/2016 (Agence Europe) - The ECB has postponed any decision to authorise the Greek banks once again to provide it with Greek government debt securities as a guarantee when using it to refinance themselves.
“We had a presentation, we had no decision”, said the President of the ECB, Mario Draghi, in Vienna on Thursday 2 June after the meeting of the Governing Council. He noted that the negotiations between Athens and its creditors had made “significant” progress and allowed an agreement to be concluded at the Eurogroup meeting at the end of May on the imminent finalisation of the first monitoring mission of the third bailout plan with an envelope of €86 billion under the European Stability Mechanism (ESM) over three years (see EUROPE 11557). “Once all prior actions are implemented, a decision will be taken for the reinstatement of the waiver” on the Greek securities, he said, adding that this ECB decision would require a further meeting of the Governing Council. The ECB also wants to wait and see what the ESM will decide regarding the disbursement of the first instalment of the tranche of €10.3 billion.
Athens and its creditors made progress in the finalisation of the first monitoring mission of the aid plan. According to the Greek press, the two sides reached an agreement, for instance on the non-retroactive removal of the specific assistance, EKAS, to low-income pensioners, the question of the disposal of non-performing bank loans guaranteed by the State and the privatisation of a minority share of the energy operator ADMIE. The Greek parliament, which voted on Wednesday to prohibit Greek political officials from owning shares in companies located abroad, is expected to approve these measures on Thursday. Athens hopes that once this hurdle has been overcome, the ESM will be able to make the promised aid available next week.
The ECB has also made some very slight upwards changes to its growth and inflation forecasts for 2016 in the Eurozone. According to the European institution, GDP growth will be on average 1.6% in 2016 and 1.7% for 2017 and 2018. Among the downwards risks, Draghi identified the “forthcoming British referendum”. He stressed that the ECB was “prepared”, whatever the result of the referendum will be, highlighting the mutual benefits of the UK's membership of the European Union.
As regards inflation, the ECB's forecasts are now as follows: 0.2% to 2016, 1.3% in 2017 and 1.6% in 2018. The 2016, these forecasts have been increased slightly to reflect energy prices. “Rates are expected to remain very low, even negative, in the coming months, before taking off again in 2016”, he said.
As regards the non-conventional monetary policy measures decided upon in March (see EUROPE 11509), the operation to buy back securities issued by non-banking enterprises of the Eurozone with the highest credit agency ratings ('CSPP') will begin on Wednesday 8 June. Wednesday 22 June is the date decided upon to start the first targeted refinancing operation for the longer term.
After the reduction of the main interest rates in March, the ECB on Thursday left the interest rates for principal refinancing operations (0.00%), the marginal loan facility (0.25%) and the deposit facility (-0.40%) unchanged. (Original version in French by Mathieu Bion)