ELA: A printing press for eurozone countries?

[unhappycamper]

http://www.dw.de/ela-a-printing-press-for-eurozone-countries/a-18250341

It's ECB carrot-and-stick policy. While the central bank no longer accepts Greek government bonds as collateral, it has raised the ceiling on ELA loans. What is ELA and how does it affect Greece's banks?

ELA: A printing press for eurozone countries?
Zhang Danhong
11.02.2015

Emergency Liquidity Assistance, or ELA, is liquidity help offered by the national central bank of a eurozone country to solvent financial institutions that are "facing temporary liquidity problems, without such operations being part of the single monetary policy," according to the European Central Bank (ECB).

This mechanism is currently considered to be the lifeline for Greek banks as the ECB decided to stop accepting junk-rated Greek government bonds as collateral for lending to financial institutions in Greece as of February 11. Greece's banks have nothing else to offer as collateral apart from their own government bonds.

The move by the ECB was a reaction to the new government's announcement that it would end the austerity program mandated by the country's international lenders. Implementation of this program had been the explicit prerequisite for the ECB's continuing willingness to accept Greece's junk bonds.

As Athens said it would not seek an extension of the bailout program agreed by previous Greek governments that is set to expire at the end of this month, the ECB decided to cut off the money supply to Greece's banking sector.