A European Central Bank official ruled out that Greece could delay paying its debts to other European Union central banks as to finance a gap of 5 to 6 billion euro in its finances for the second half of 2014.
As euro zone finance ministers convened in Luxembourg, Joerg Asmussen told reporters: “We must find a way to close this financing gap and there is absolutely no way that it can be done in a way of rollover bond”. He said that such actions would constitute direct government financing which goes against the ECB’s charter. Financing private banks to finance governments does not go against the ECB’s charter.
In an interview to newspaper Naftemporiki, Greece’s finance minister Yannis Stournaras suggested that the country could mend its finances by delaying, or rolling over, its debts to other European Union central banks. He also said that the ECB was blocking any such move and that another solution had to be found.
Greece next year will need to pay 10 billion euro for maturing bonds which are held by E.U. central banks. Last November, E.U. central banks agreed to pass on some of the earnings they had made on Greek bonds back to Greece.
From the second half of 2014, unless something changes, Greece will not be receiving any further financing from its official sector creditors, the International Monetary Fund, the ECB and the E.U.
In the past three months, the other gap that has been emerging in Greece’s finances is that between the IMF on the one hand and the ECB and the E.U. on the other, as to how to resolve the situation.