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Greece leaves the programs on August 20, an undoubtedly positive development with some disadvantages, because theoretically, the country will lose the derogation of the ECB allowing the purchase of Greek bonds and the potential participation of the country in quantitative easing program, note on Credit Suisse
The Board notes that it is ultimately a decision of the ECB, but notes that it is improbable To include Greece in the quantitative easing program before the end of the year, notes that a [1 9459003] positive badysis of the debt sustainability of the ECB send a clear positive signal to the markets, which Credit Suisse considers likely. He notes that in such a case the confidence of the markets in Greece will be strengthened, a crucial treaty for investors and … wait for the QE
The derogation
The Chamber comments the latest statements of Mario Draghi and Benoua Ched on the question, noting that the declarations of the central banker give way to "interpretation", although he specified that the Greek bonds can be included in the QE only if there is a waiver.
However, he noted that Mr. Draggi did not rule out the possibility of inclusion At the same time, he suggested that even a positive report on the ECB's sustainability might not be enough
In conclusion, it seems that the only way to include Greece in the QE is to stay in a program or move to the investment levels of the rating agencies (something unlikely in the short term ), or the ECB to somehow change the rules of for renunciation (something as unlikely)
The reaction of the markets
if the Greek debt is considered as sustainable by the ECB for future ODA, this will logically lead to a positive market reaction as investors will strengthen their confidence in the country's ability to repay its debt
In fact, the Greek economy shows clear signs of improvement :
– The economy has returned to growth Credit Suisse forecasts GDP growth of 2.1% and 2.2% respectively this year and 2019.
– Return of Financial Regularity The amount of bank loans from the ECB's Emergency Liquidity Facility (ELA) drops considerably from 2015, falling below 20 billion
] – Improving Banks' Resilience, in Line with
– The Largest Challenge Remains the Level of NPLs, Where Progress Is Also Underway
– Debt relief measures decided at the Eurogroup will be reasonably sufficient to restore the viability of the Greek Debt.
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