In 2010 Anglo Irish Bank needed 30b in cash, to pay deposits and bonds. The Irish government hadnt got that on hand. In fact, it was out of any sort of then acceptable collateral. So, it wrote an IOU to Anglo, saying “we’re good for this”. They then took this to the Central Bank of Ireland, swapping a promissory note for actual cash via ELA.
Greece has now been told that its available collateral notwithstanding the ECB will maintain ELA funding at what it was. With deposits flowing out at a rate of 1b plus per day this clearly puts the screws bigtime on the Greek government.
The ECB allowed this Irish monetary sleight of hand. Things, not least tempers and mood, are different with greece but there is at least a possibility that they might so allow. At the least Greece could argue that as was treated Ireland so should they be.
These prom notes dont last – the ECB required them to be extinguished, quite smartish, but as a means of getting over a liquidity hump, and that is where Greece is at now, they are worth considering.