European Central Bank could begin buying Greek state bonds from July

The European Central Bank (ECB) could begin buying Greek state bonds from July, after Greece repays maturing bonds currently held by ECB, Mario Draghi told reporters on Thursday.

The European central banker, responding to questions, added that the same general rules applying for all Eurozone member-states will also apply for Greece, which means that ECB could buy up to 33 pct of state bonds traded in the secondary market, or not more than 25 pct of any specific bond issue. Draghi underlined that in the case of Greece, the country’s participation in the QE program meant that an exception set by ECB on accepting Greek state bonds as collateral – for as long as the country was in an adjustment programme – was valid.

Bankers said that the July timetable was set by the ECB because the central bank currently holds a heavy portfolio in Greek state bonds and, if it decided to buy more Greek bonds in March, it would have surpassed the 33 pct limit.

Draghi on Thursday announced the launch of an expanded asset purchase programme by the ECB starting in March, encompassing the existing purchase programmes for asset-backed securities and covered bonds, under which combined monthly purchases of public and private sector securities will amount to €60 billion. He had clarified that some additional eligibility criteria will be applied in the case of countries under an EU/IMF adjustment programme.