Greece says 'will not be blackmailed' after ECB move

[ATHENS] Greece said on Thursday it would not be "blackmailed" and insisted its banks were secure after the European Central Bank moved to restrict Greek lenders' access to a key source of cash.

"The Greek republic does not intend to blackmail anyone but will not be blackmailed either," a government source said, adding that the Greek banking system "was fully secure".

In an announcement late Wednesday, the ECB said it would no longer allow Greek banks to use government debt as collateral for loans.

Athens views this decision as "an act of political pressure to enable the rapid conclusion of an agreement" with Greece's international creditors, the government source said.

"The liquidity and funding of Greek banks is fully safeguarded by the ELA mechanism," the source said, referring to the ECB's financial lifeline for Greek banks, known as emergency liquidity assistance.

The anti-austerity government of Prime Minister Alexis Tsipras came to power after a January election on a mandate to renegotiate Greece's unpopular EU-IMF bailout and erase over half the country's debt.

Mr Tsipras and his Finance Minister Yanis Varoufakis have been holding a flurry of meetings with EU leaders and ECB officials this week in the hope of drawing allies to Greece's cause.

In what is likely to be a tough meeting, Mr Varoufakis will see his German counterpart Wolfgang Schaeuble on Thursday, though Berlin has adamantly ruled out any debt relief for Athens.

The Greek stock market plunged more than nine percent in early trading before recovering some of its losses.

AFP