ECB holds teleconference, raises the pressure on Greece

By Renee Maltezou & John O'Donnell

The European Central Bank raised pressure on Greece on Thursday to extend a bailout deal with its international creditors as new leftist prime minister Alexis Tsipras told EU leaders austerity is killing his economy and they must find an alternative.

After eurozone finance ministers failed to agree on a joint statement on the way forward on Greece's debt crisis, the ECB's Governing Council held a short-notice teleconference to discuss how long it could continue to keep Greek banks afloat.

The ECB declined comment, but two sources familiar with the matter said it concerned the provision of Emergency Liquidity Assistance (ELA) by the Greek central bank, which the ECB authorized as a temporary expedient when it stopped accepting Greek government bonds in return for funding last week.

Arriving for his first European Union summit, Tsipras told reporters: ?I'm very confident that together we can find a mutually viable solution in order to heal the wounds of austerity, to tackle the humanitarian crisis across the EU and bring Europe back to the road of growth and social cohesion.?

Other leaders said it was up to Greece to respect budget discipline and economic reform commitments made by previous governments if it wanted continued aid.

ECB executive board member Peter Praet said the ECB would apply its existing ELA rules to Greece. ?It is key that the banks benefiting from emergency liquidity assistance remain solvent,? he told the Financial Times.

His comments appeared to signal that the central bank could cut the cash lifeline if Greece failed to reach a deal with its creditors before the 240-billion-euro bailout expires at the end of this month, exposing Greek banks to a risk of...