Draghi defends European Central Bank’s role in Greek crisis

Bank is exposed to equivalent of 65% of Greek GDP, says ECB president

ECB president Mario Draghi arrives at a meeting of the European Parliament’s Economic and Monetary Affairs Committee, where he said the financial situation of Greece under the last government “was not the fault of the troika, not the fault of the ECB”. Photograph: Yves Herman/Reuters

European Central Bank president Mario Draghi has defended the ECB's role in the current Greek crisis, rebutting accusations that the bank had "blackmailed" Greece.

Responding to a question from Portuguese MEP Marisa Matias at a hearing at the European Parliament in Brussels, Mr Draghi said the ECB had more than € 100 billion of exposure to Greece, more than twice its exposure in December.

“The ECB has €104 billion of exposure to Greece. This is equal to 65 per cent of Greek GDP, which is the highest exposure in the euro zone . . . so what sort of blackmail is this? We haven’t created any rule for Greece, rules were in place and they’ve been applied,” he said during the exchange.

During his appearance before the European Parliament’s economic and financial affairs committee in Brussels yesterday, Mr Draghi expressed confidence that discussions between Greece and its international partners would lead to a “successful conclusion” of the current review programme.


Debt obligations

However, he warned that Greece had to “fully honour its debt obligations”.

He said the financial situation of Greece under the last government “was not the fault of the troika, not the fault of the ECB”. The contagion risk posed was also much lower than during the last crisis, he said, although he stressed that he was only speaking of the short term.

While Mr Draghi repeated his belief that Greece would at some point in the future be in a position to partake in the ECB’s quantitative easing programme, launched last month, he said it still had to fulfil several conditions.


“There will be a time when will we be able to reinstate the waiver, we’ll be able to do QE to Greece, but several conditions have to be satisfied and they are not there yet.” However, he said he was confident that the conditions would be satisfied.

The Greek banking system was also discussed during the hearing with MEPs. While raising concerns about the liquidity of the banks, the ECB chief said the banking system was not facing a solvency crisis. “Greek banks are this time in a much better state than they were on the occasion of the last crisis.”

Mr Draghi said Greek banks were compliant with a number of “minimum regulatory requirements. . . At the same time the liquidity situation . . . has been deteriorating and therefore the banks’ dependence on ECB funding has increased.”

The ECB has been propping up Greek banks with emergency funding known as emergency liquidity assistance. The ECB is believed to have increased the maximum amount of emergency liquidity it provides to the Greek banking system by €400 million last week.

Suzanne Lynch

Suzanne Lynch

Suzanne Lynch, a former Irish Times journalist, was Washington correspondent and, before that, Europe correspondent