ECB hikes emergency liquidity for Greek banks

The European Central Bank on Wednesday boosted its cash lifeline for Greece's struggling banks by 900 million euros ($981 million), Bloomberg News reported.

The decision by the ECB's board of governors on the programme known as Emergency Liquidity Assistance (ELA), which the bank declined to confirm, came as the debt-mired country's parliament debated a crucial new reform package.

The institution had kept its ELA cap unmodified at 89 billion euros since June 27, but earlier this month tightened conditions as the radical left government in Athens rejected reforms that creditors had been demanding in exchange for aid.

However following a new bailout agreement between Greece and its eurozone partners in Brussels on July 13 following marathon talks, the ECB last Thursday increased the stop-gap credit facility by 900 million euros.

The deal with creditors requires Greece to push through a raft of market-oriented laws as a sign of good faith. Lawmakers on Wednesday were debating the second such package after approving the first last week.

Only after Greece approves the required legislation will the 18 other eurozone leaders start negotiations over a three-year bailout worth up to 86 billion euros, Greece's third rescue programme in five years.

Until the package can take effect, the ELA is the only available source of financing for Greek banks and, by extension, the sole financial lifeline preventing the Greek economy from imploding.