13.08.2012
By Simon Miller
The European Central Bank (ECB) has cut back its funding of Greece finance houses by almost €50bn (£39.2bn).
ECB funding to Greek banks dropped from €73.6bn to nearly €24bn which could be seen as a hardening of the central bank's policy towards Greece.
As a result, the Bank of Greece has stepped in, providing €106.31bn in emergency liquidity to the Greek banking sector at end-July, a jump from around €62bn the previous month.
The ECB's scaling back of funding came after the deputy parliamentary leader of German chancellor Angela Merkel's Christian Democrats said the country would not hesitate to veto further aid to Greece if it failed to meet its bailout conditions.
Michal Fuchs told German newspaper Handelsblatt that even if the glass was "half full", it wouldn't be sufficient for a new aid package.
He added: "Germany cannot and will not agree to that. We long ago reached the point where the Greeks must show they are capable of delivering a shift. A policy of the last, last, last chance won't work anymore and must come to an end."
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