The banks which has taken credit on cheap rates during the crises period is now will going to pay it back. The ECB has stated that the 278 banks of euro group that borrowed money for 3 years which they have to repay now amounting 137.16 billion Euros ($ 185 billion; £117 billion).
The cash amount lent in Dec 2011 & Feb 2012 to the banks will have to be repaid on 30th Jan 2013 ECB said. The loans were approved when many afraid that the euro-zone would break away from one other.
ECB lent the money with the fear that Greece, which was hunting for two international bailouts could default on its large amount of debts. In the mean time, many investors deliberated the enormous economies of Spain and Italy might be the next which would require international aid.
Mario Draghi, head of the European Central Bank said that during the past year, the 17-nation currency which dates back to 1999 had in point of fact been re-launched. At World Economic Forum in Davos, Switzerland he added, If one has to seem for a universal denominator for defining year 2012 why it will be remembered then one can call it the year of re-launching of Euro. All the indicators point towards a significant improvement in financial conditions.
According to the forecast of ECB, the euro-zone economic growth in the year 2013 would be ranging between minus 0.9% and plus 0.4%. ECB lent more than 1 trillion Euros to banks at low interest rates. The data of ECB tells that it provided 530 billion Euros to 800 banks in February 2012 at low interest loan all across the European Union out of which 37.4 billion Euros were lent to UK banks.
Almost 489 billion Euros was lent in December, 2011 and this was from the first batch which is to be paid back in the early hours. The early repayment could be witnessed as an indication that the euro-zone is on the road to recovery. But ECB has not revealed the nationalities of the borrower banks that are repaying the borrowed loans early.
Many of the banks may be from the financial stronger countries like Germany and Netherlands which suggests that the difference remains between the more solvent north of Europe and its weaker south. The countries Ireland and Portugal also required bailouts, despite the fact that both the countries have been able to return the borrowing money in financial markets.
By marc87 from Pixabay