More emergency funds for Greece

Greece's embattled banks were given the go-ahead to tap an additional ten billion euros ($11.37 billion) in emergency funding, the new left-wing government in Athens said in a statement on Thursday.

The announcement comes as as investors reacted to the European Central Bank's (ECB) decision to cut off the debt-ridden nation's access to cheap liquidity, leaving Greece's finance institutions reliant on the national central bank's dwindling emergency liquidity assistance (ELA) line.

The head of Germany's powerful Bundesbank, Jens Weidmann, warned Greece against using emergency funding to prop up its banks long-term and said countries must bear the impact of their decisions, further isolating Athens after it all but ditched a reform-for-aid deal.

Greece 'will not be blackmailed'

Greek government spokesman Gavriil Sakellaridis said the ECB's move was meant to ramp up pressure on the new leftist government, which rode into office on a wave of popular opposition to years of crippling austerity and a pledge to renegotiate the country's crushing debt burden with its international lenders: the ECB, the European Commission and the International Monetary Fund, known collectively as the troika.

"Greece does not aim to blackmail anyone, but will not be blackmailed either," Sakellaridis said. "The ECB's decision is an act of political pressure to quickly reach a deal."

'No impact'

A Bank of Greece official said the ECB's move to stop accepting sub-investment grade collateral in return for funding would "not have an impact on the stability and liquidity of the country's banking system."

The move came hours ahead of a crucial meeting in Berlin between the Greek and German finance ministers. Germany has been a strong critic of the Syriza-led government's efforts to skirt its debt-paying obligations.

pad/hg (AP, Reuters)