The European Central Bank (ECB) is propping up Greece with a secret infusion of €100 billion ($126 billion) in emergency liquidity assistance (ELA) funds, the Financial Times reported Tuesday.
The liquidity was secretly approved by the European Central Bank in Frankfurt as part of its emergency liquidity assistance program, which is designed to quietly aid struggling euro zone economies, according to the Financial Times. This assistance may be all that is keeping Greece from leaving the economic union.
The absence of an official announcement, as well as any information about the terms and conditions of the aid, may be due to the nature of the program, which is designed to help ailing EU economies without causing the further alarm that its assistance could create among investors.
According to the Financial Times, the ELA was a lifesaver for Ireland's financial system, and it was designed to be a temporary lending facility, segregated from normal lines of liquidity, for countries with ailing banks. Although the program is not widely known, it is one of the European Central Bank's most powerful tools in keeping countries afloat -- and markets calm -- and it has the power to determine in some cases whether or not a struggling economy can succeed or fail.
The Financial Times claims that analysts have examined the European Central Bank's financial statements and found a €121 billion expenditure under the heading other claims on euro area credit institutions, and they deduced that this was for the ELA, whose funds come from a network of euro zone central banks. Barclays' analysts think that Greece may be using €96 billion in ELA, according to the newspaper's report, while Ireland may be using €41 billion and Cyprus €4 billion.
Brett Forman is a writer, editor and musician living in New York.