The Greek and the European Union flags flutter in front of Maximos Mansion at the Prime Minister offices, in Athens, Greece. File photo: REUTERS
The Greek and the European Union flags flutter in front of Maximos Mansion at the Prime Minister offices, in Athens, Greece. File photo: REUTERS

Frankfurt — From August 21, the European Central Bank (ECB) will revoke an exemption granted to Greece from its minimum credit rating requirement, it said on Friday.

This will shut banks’ access to cheap central bank cash because Greek government bonds are rated junk.

Greece will exit its third bailout programme later in August, and the "waiver" from the ECB’s minimum credit rating requirement can only be granted to countries in bailout programmes.

While revoking the waiver could increase funding costs for banks and keep Greece out of the ECB’s €2.6-trillion bond purchase scheme, a "clean exit" from the bailout is still likely to shore up confidence as Greece would finally be standing on its own feet after being propped up for years by international lenders.

Reuters

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