The European Central Bank said that it does not wish to profit from its holdings of Greek sovereign bonds, and will permit eurozone member states to pass on those profits to Greece to aid in that country’s debt crisis.
Reuters reported Wednesday that the president of the ECB, Mario Draghi, originally proposed on Thursday that profits from the body’s holdings of Greek sovereign bonds be relinquished to the central banks of eurozone states, which could then apply those funds to the Greek debt crisis.
ECB officials Joerg Asmussen and Luc Coene supported the idea, and discussions are under way to determine how to book such profits up front so that they can be provided to Greece as an early lump sum.
While that news may be good, it comes as eurozone finance ministers have abandoned plans to meet with Greek officials face to face on Wednesday to discuss plans for a second bailout. Ministers have said that Greek party leaders have not provided a sufficient commitment to reform measures demanded by the troika–the ECB, the European Commission and the International Monetary Fund.
If Greece fails to convince leaders to extend additional funds by March 20, it will default–an event that could be disastrous for far more countries than itself. The ECB has been pressured by European leaders to be more active in finding a way to help Greece avoid that event, but has resisted. The surrender of profits from Greek bonds presents a way for the ECB to participate while still avoiding actions it does not want to take.