The European Central Bank raised pressure on Greece yesterday to extend an international bailout deal or risk a bank collapse, as new leftist Prime Minister Alexis Tsipras told EU leaders austerity was killing his country's economy.
After eurozone finance ministers had failed to agree on a joint statement on the way forward on Greece's debt crisis, the ECB's governing council held a teleconference to discuss how long it could continue to keep Greek banks afloat.
The ECB declined to comment, but two sources said it concerned provision of emergency liquidity assistance, or ELA, to the Greek central bank, which the ECB authorised as a temporary expedient as it stopped accepting Greek government bonds in return for funding last week.
Arriving in Brussels for his first EU 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."
German Chancellor Angela Merkel, vilified by the Greek left as Europe's "austerity queen", said her country was prepared for a compromise.
"Europe always aims to find a compromise," she said.
"However, it must also be said that Europe's credibility depends on us respecting rules."
Other leaders said it was up to Greece to respect reform commitments made by previous governments if it wanted aid.
ECB executive board member Peter Praet said the eurozone would apply its ELA rules to Greece. "It is key that the banks benefiting from emergency liquidity assistance remain solvent," he said.
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