ECB emergency cash provides sticking plaster for Greece, but businesses need certainty to invest

ECB emergency cash provides sticking plaster for Greece

One of the fundamental problem with the Greek banking system is that banks have all but stopped lending, starving the economy of the oxygen it needs. This could inflict long term damage to any genuine recovery hopes.

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Yael Selfin, Head of Macroeconomics at KPMG, comments on the latest ECB announcement on Greece:

“The latest approval by the European Central Bank for a €3.3bn increase to the Greek banking system will be a sticking plaster to alleviate the liquidity needs. One of the fundamental problem with the Greek banking system is that banks have all but stopped lending, starving the economy of the oxygen it needs. This could inflict long term damage to any genuine recovery hopes.

“Businesses need certainty to plan and invest, not another short term stop gap fix, so even if an extension to current Troika arrangements is granted, we are still a long way off the economy beginning to heal.”

-ENDS-

 

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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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