Whoa! Greece Consumers Withdraw €1 Billion in Banking Run as ECB Pledges New Funds to Stave Off Grexit

This is amazing.

At the Telegraph UK, "Greek debt crisis endgame: ECB agrees to pump more money into Greece's banks as Russia enters the ring."

Plus, "European authorities forced to stave off Greek banking collapse as capital controls loom":

ECB increases tap on emergency funding as prospect of capital controls and bank closures beckon before Monday's emergency summit.

Greece's banking system was saved from a weekend collapse after the European Central Bank was forced to pump emergency rescue funds and halt the immediate threat of capital controls.

The ECB took the unusual move to raise its emergency liquidity assistance (ELA) twice in the space of three days as a further €1.2bn fled the financial system on Friday. The ceiling on ELA was reportedly raised by €1.8bn according to reports, and came following a request from the Bank of Greece.

The Frankfurt-based central bank took the drastic action after its officials warned European finance ministers that Greece's banks may not be open for business on Monday. Total deposit flight has now soared to €4.2bn this week as full-blown panic over the country's eurozone future has set in.

ELA funding is one of the last critical links keeping Greece in the single currency.

Without the funds, Greece would likely find itself in the midst of a bank run, forcing the Leftist government to impose draconian capital controls to prop up the banking system. Such measures, which include deposit withdrawal limits, were last seen in the eurozone in 2013 in Cyprus after the ECB had threatened to cut the life support for Nicosia's financial system.

The drip feed of cash will now be reviewed by the ECB's governing council on Monday, when EU leaders and finance ministers will convene for a last ditch attempt to thrash out their differences with Athens.

Donald Tusk, the man chairing summit, confirmed that Athens would be delivered an ultimatum deal as the country's future reached a "critical" point.

"We are close to the point where the Greek government will have to choose to accept what I believe is a good offer for support, or to head towards default," said Mr Tusk.

"The game of chicken needs to end, and so does the blame game. There is no time for more games."

He added the meeting would not produce a final resolution to the country's five-month negotiating impasse, with any ultimate decision remaining with the eurozone's finance ministers.

"There is time, but only a few days. Let us use them wisely," said Mr Tusk...

More.

I still don't believe that European leaders will allow Greece to exit the EMU. It'd be the beginning of the end of the modern European Union, setting a precedent in other states, especially the PIIGS nations --- Portugal, Ireland, Italy, Greece, and Spain --- and create centrifugal pressures on the system.

It's going to be an interesting week next week.