This in turn had a severe impact on an already severely weakened financial sector. Between December 2014 and June 2015, deposit outflows amounted to more than a quarter of total deposits. Lack of adherence to the second programme barred the ECB, under its rules, from waiving its minimum credit requirements and accepting Greek government-linked securities as collateral in its monetary policy operations.
Nevertheless, the Eurosystem provided the liquidity necessary for the Greek economy to function, with adequate safeguards against monetary financing of the government. As a result, central bank funding rose from € billion to over € billion, more than two-thirds of Greece’s gross domestic product.