ECB officials say no to easier funds for Greece now

By John O'Donnell & Georgina Prodhan

European Central Bank policymakers played down the prospects of any immediate loosening of funding for cash-strapped Greece, saying that when it came to accepting the country's bonds as security for central bank credit, the answer remained no.

Speaking to journalists in Frankfurt, the ECB's vice president underlined the seriousness of the situation facing Greece, talking openly about a possible default, which would be the first of its kind in the 16-year-old currency bloc.

"Only when the final review of the ... programme will be completed and successful we, the Governing Council, can consider changing that. But not before," Vitor Constancio told journalists, commenting on Greek banks tapping ECB funds.

His remarks echoed those made earlier by Ewald Nowotny, who as head of the Austrian central bank also sits on the ECB's policy-setting Governing Council. Both counter the optimism of the Greek government that a deal is near.

"There is always a lot of noise in such a situation and I think the important point is to distinguish the noise from the facts," Nowotny told CNBC television.

"For us, it is quite clear that we have certain conditions to be met. The one condition is ... whether we can accept for instance Greek assets, Greek bonds, as collateral. The answer is, for the time being: No," said Nowotny.

In February, the European Central Bank abruptly cancelled its acceptance of Greek bonds in return for funding, shifting the burden onto Athens' central bank to finance its lenders and isolating Greece unless it strikes a new reform deal.

The move, which means the Greek central bank provides banks with tens of billions of euros of emergency liquidity, was...