ECB supports Greek banks after €1.2bn in deposits withdrawn

The European Central Bank has sanctioned further support for the Greek banking system amid fears for its stability, Ahead of Monday's crucial EU leaders' summit

The ECB agreed at an emergency meeting on Friday to raise the cap on funding for the Greek banking sector, according to reports.

The ECB move came as German chancellor Angela Merkel’s chief-of-staff said Berlin will work “until the last minute” to secure Greece’s future in the eur zone.

Bankers said that about €4.2 billion flooded out of Greek accounts this week, with €1.2 billion withdrawn on Friday alone, despite central bank efforts to restore calm.

The Bank of Greece issued a statement on Friday stating that the Greek banking system remains stable.

Russia played down any possibility of Russian financial aid for Greece. Asked if Putin and Tsipras had discussed the issue, Kremlin spokesman Dmitry Peskov said: "No, no, no."

Taoiseach Enda Kenny said time is running out to reach a solution to the Greek crisis and said the country is now getting close to “real crisis time”.

Mr Kenny, who will attend an emergency summit of European leaders on Monday, said he was hopeful this crisis could be averted.

He said the instability and the indecisiveness is really hurting the people of Greece and this was “exceptionally difficult”.

Speaking at a meeting of the British-Irish Council, Mr Kenny said he feared a “Plan B” for Greece may be needed.

Speaking in advance of the crisis summit in Brussels, Peter Altmaier, a close ally of the German leader, said: "We all want that the euro is retained and the problem is solved."

A breakthrough could only come, he warned, if the Greek government realised that time was tight and that it must “lay sensible suggestions on the table”.

“We will negotiate until the very last minute,” said Mr Altmaier on German radio, adding that there was a “great level of common ground” between Greek EU/IMF creditors.

Stepping up the pressure on Athens, European Commission president Jean-Claude Juncker said he had lost trust in the Greek government and its prime minister, Syriza leader Alexis Tsipras.

“I don’t understand Tsipras,” said Mr Juncker to Der Spiegel. “The trust I placed in him has not always been adequately returned.”

Instead of condemning its creditors, Mr Juncker called on Mr Tsipras to tell Greek voters how the commission had promised investment worth €35 billion to 2020.

“If I were Greek prime minister I would sell that as a success, instead I hear nothing,” said Mr Juncker, until recently seen as an ally of the Greek leader in Brussels.

During several recent meetings, Mr Juncker said he had warned the Greek leader there was no one in Europe who "could pull a rabbit out of the hat".

“I warned Mr Tsipras many times he should not count on me being able to prevent a failure of the talks,” he said.

The decision by the ECB to further support the beleaguered Greek banking system comes amid increasing concerns about the health of the Greek financial sector after ECB president Mario Draghi told Thursday night's euro group meeting that Greek banks might not open on Monday.

Mr Tsipras said he believes a solution will be reached in the Greek crisis as he welcomed the EU’s decision to convene an emergency summit of euro zone leaders on Monday evening.

The Greek prime minister, who is due to meet Russian president Vladimir Putin today during the second day of his two-day visit to Russia, said in a statement this morning that the euro zone summit is a positive development on the road toward a deal.

“All those who are betting on crisis and terror scenarios will be proven wrong. There will be a solution based on respecting EU rules and democracy which would allow Greece to return to growth in the euro” he said.

With focus now turning to whether a technical deal can be secured over the weekend in advance of Monday’s euro group and EU summit in Brussels, European Commission president Jean-Claude Juncker said he expects to speak to Mr Tsipras over weekend.

A spokesman for the European Commission president said Mr Juncker had spoken with German chancellor Angela Merkel and French President Francois Hollande by phone this morning. Euro zone finance ministers will also meet in Brussels on Monday ahead of the leaders' summit to consider any deal that is presented.

The European Central Bank has sanctioned further support for the Greek banking system amid fears for its stability, head of Monday’s crucial EU leaders’ summit

The ECB agreed at an emergency meeting on Friday to raise the cap on funding for the Greek banking sector, according to reports.

The ECB move came as German chancellor Angela Merkel’s chief-of-staff said Berlin will work “until the last minute” to secure Greece’s future in the eur zone.

Bankers said that about €4.2 billion flooded out of Greek accounts this week, with just €1.2 billion withdrawn today, despite central bank efforts to restore calm. The Bank of Greece issued a statement on Friday stating that the Greek banking system remains stable.

Russia played down any possibility of Russian financial aid for Greece. Asked if Putin and Tsipras had discussed the issue, Kremlin spokesman Dmitry Peskov said: “No, no, no.”

Taoiseach Enda Kenny said time is running out to reach a solution to the Greek crisis and said the country is now getting close to “real crisis time”.

Mr Kenny, who will attend an emergency summit of European leaders on Monday, said he was hopeful this crisis could be averted.

He said the instability and the indecisiveness is really hurting the people of Greece and this was “exceptionally difficult”.

Speaking at a meeting of the British-Irish Council, Mr Kenny said he feared a “Plan B” for Greece may be needed.

Speaking in advance of the crisis summit in Brussels, Peter Altmaier, a close ally of the German leader, said: “We all want that the euro is retained and the problem is solved.”

A breakthrough could only come, he warned, if the Greek government realised that time was tight and that it must “lay sensible suggestions on the table”.

“We will negotiate until the very last minute,” said Mr Altmaier on German radio, adding that there was a “great level of common ground” between Greek EU/IMF creditors.

Stepping up the pressure on Athens, European Commission president Jean-Claude Juncker said he had lost trust in the Greek government and its prime minister, Syriza leader Alexis Tsipras.

“I don’t understand Tsipras,” said Mr Juncker to Der Spiegel. “The trust I placed in him has not always been adequately returned.”

Instead of condemning its creditors, Mr Juncker called on Mr Tsipras to tell Greek voters how the commission had promised investment worth €35 billion to 2020.

“If I were Greek prime minister I would sell that as a success, instead I hear nothing,” said Mr Juncker, until recently seen as an ally of the Greek leader in Brussels.

During several recent meetings, Mr Juncker said he had warned the Greek leader there was no one in Europe who “could pull a rabbit out of the hat”.

“I warned Mr Tsipras many times he should not count on me being able to prevent a failure of the talks,” he said.

The decision by the ECB to further support the beleaguered Greek banking system comes amid increasing concerns about the health of the Greek financial sector after ECB president Mario Draghi told Thursday night’s euro group meeting that Greek banks might not open on Monday.

Mr Tsipras said he believes a solution will be reached in the Greek crisis as he welcomed the EU’s decision to convene an emergency summit of euro zone leaders on Monday evening.

The Greek prime minister, who is due to meet Russian president Vladimir Putin today during the second day of his two-day visit to Russia, said in a statement this morning that the euro zone summit is a positive development on the road toward a deal.

“All those who are betting on crisis and terror scenarios will be proven wrong. There will be a solution based on respecting EU rules and democracy which would allow Greece to return to growth in the euro” he said.

With focus now turning to whether a technical deal can be secured over the weekend in advance of Monday’s euro group and EU summit in Brussels, European Commission president Jean-Claude Juncker said he expects to speak to Mr Tsipras over weekend.

A spokesman for the European Commission president said Mr Juncker had spoken with German chancellor Angela Merkel and French President Francois Hollande by phone this morning. Euro zone finance ministers will also meet in Brussels on Monday ahead of the leaders’ summit to consider any deal that is presented.

Additional reporting agencies