Draghi’s Decision

To Save or Not to Save

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Caught between a rock and a hard place.
  • Why it matters

    Why it matters

    European Central Bank President Mario Draghi holds the lifeline keeping Greece afloat and is deeply reluctant to cut it without a clear decision from Europe’s political leaders.

  • Facts


    • The ECB on Monday night maintained its ELA to Greek banks at €89 billion, but it also tightened collateral terms.
    • Greek Prime Minister Alexis Tsipras is to present his proposals at an emergency summit of euro zone leaders on Tuesday.
    • Critics of the ECB warn that the ELA assistance to Greek banks may soon breach E.U. rules.
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With European leaders including German Chancellor Angela Merkel  insisting that the ball is now in Greece’s court following the people’s resounding “No” to bailout terms on Sunday, the president of the European Central Bank, Mario Draghi, finds himself in the uncomfortable position of being responsible for Greece’s immediate fate.

Like Greece, Mr. Draghi is running out of time and options. He keeps stressing that parliaments and politicians must decide on Greece’s future, but there’s no doubt that he’s a key player in this unfolding drama, with the power to kick Greece out of the euro almost overnight by shutting off its access to cash.

Greece is perhaps days away from bankruptcy. European leaders will be meeting on Tuesday to once again begin talks about whether Greece should receive a fresh bailout from its international creditors. But until they take that decision, it’s up to Mr. Draghi to decide how long he wants to keep Greece’s banks afloat.

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