Greece's economy is living on borrowed time—particularly if you believe the old adage that time is money.
That's because Greek banks have for months been relying heavily on what is called "emergency liquidity assistance" from the European Central Bank for just more than 80 billion euros ($90 billion). Otherwise known as ELA, emergency liquidity assistance is a loan program available for national banks in distress, allowing access to cash at an interest rate set by the ECB's Governing Council.
"It's a bit like printing euros for that one national bank," said Donald Luskin, chief investment officer at TrendMacro, who points out the loan comes at a higher interest rate since it's often backed by the flimsiest of notes. "But ELA doesn't come as an obligation or a risk of the Eurosystem."
All of the risk falls on Greece if the loan can't be repaid, unlike normal circumstances when a country has adequate collateral to offer and can receive a loan from the ECB at a lower interest rate.
"It's strange because normally the banks that take on the risk make the decisions, but in this case it's Greece with the risk, and the ECB making the decision," Luskin told CNBC.
But since the ECB rejected Greek bonds as collateral, ELA has become the last resort for the troubled nation that's seeing deposit outflows in commercial banks peak at 300 million euros a day.
Without ELA propping up Greece's commercial banking system, banks would be called to repay the National Bank of Greece. Without enough cash to do just that, banks could close, deposits could be lost, depression could ensue. It's powerful leverage the ECB holds.