Greek finance minister responds to the surprise ECB announcement that crashed Greek stocks

Greek Finance Minister Yanis VaroufakisAFP PHOTO / ARIS MESSINISGreek Finance Minister Yanis Varoufakis.

On Tuesday, the European Central Bank announced that it lifted its waiver on credit requirements for assets posted as collateral by Greek financial institutions.

Following this announcement, Greek finance minister Yanis Varoufakis issued a statement that said, “This decision does not reflect any negative developments in the country’s financial sector and comes after two days of substantial stabilisation.”

Varoufakis added that this announcement from the ECB puts pressure on other members of the eurozone to, “proceed rapidly to conclude a new mutually beneficial agreement between Greece and its partners.”

Here’s Varoufaki’s full statement, translated to English from Greece:

The Governing Council of the ECB decided to refer to emergency liquidity assistance (ELA) of Eurosystem counterparties seeking to secure liquidity through deposit Greek securities as collateral.

This decision does not reflect any negative developments in the country’s financial sector and comes after two days of substantial stabilisation. According to the European Central Bank (ECB), the Greek banking system remains adequately capitalised and fully protected through access to the ELA.

The European Central Bank (ECB) decision puts pressure on the Eurogroup to proceed rapidly to conclude a new mutually beneficial agreement between Greece and its partners.

The government daily widens its circle of consultation with partners and institutions to which they belong, remains unwavering in its goal of social salvation program approved by the vote of the Greek people, and consults with a view to drawing up European policy that will finally end the hitherto self-sustaining social crisis of the Greek economy.

The ECB’s statement effectively means that Greek banks can’t post Greek sovereign bonds as collateral to be used in the ECB’s monetary policy operations.

Following this news, the ‘GREK’ ETF that tracks the Greek market tanked, while the euro also sold off.

On Twitter, Greek journalist Efthimia Efthimiou said that ECB president Mario Draghi told Greek prime minister Alexis Tsipras the ECB’s announcement doesn’t effect the Greek financial system because Greek banks can still get financing through the emergency liquidity assistance program.

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