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Governor of the Bank of Greece Yannis Stournaras. The central bank sees its debt sustainably in the short and medium term.
The Bank of Greece considers the short- and medium-term debt to be sustainable, while its long-term sustainability is positive, but with an asterisk, noting that this requires adjustment and ongoing fiscal reforms, and considers that Commitment of Finance Ministers for new interventions if necessary
The new badysis of the debt sustainability of the central bank, following the decisions of the Eurogroup of 21 June, will be included in the interim report on the currency economic policy, which will present Governor Yiannis Stournaras, tomorrow Monday.
At the same time, prepares its own badysis of the European Central Bank, which, however, do not disclose these sources are warning. The report of the Bank of Greece would indicate that the conditions for the incorporation of Greek bonds into the quantitative easing program of the ECB are now fulfilled, but it is up to the ECB to examine and decide in consequence
that conditions for QE membership are the durability of the debt and the inclusion of Greek bonds in the investment grade category of rating agencies or, alternatively, the waiver if the country is in a program
However, they come to the conclusion that the country will lose the waiver as soon as it leaves the program on August 20, just as it did with Cyprus when it came out of its own program. In addition, the most likely scenario is not to join the quantitative easing program, as the deadline until August 20 – date of waiver waiver – is minimal.
The presentation of the interim report of the Bank of Greece will undoubtedly be an opportunity the central banker formulates his positions on the conditions of exit from Greece from the memorandum following the new wave of criticism that government officials have received in recent days. According to Mr Stournaras, he will insist that it would be better for Greece to take the precautionary credit line, as this would reduce the cost of borrowing
. It also stresses that the obligation to maintain high primary surpluses has long been a reflection of economic policy mistakes in the recent and distant past and has the effect of penalizing future generations.
The debt sensitivity badyzes contained in the report show that the main risk is the inability to reach primary surpluses. If primary surpluses represent 1.5% of GDP in the long term, instead of the projected 2.2% of GDP, debt and service needs outweigh the limits of sustainability. It should be noted that according to the IMF, the target of a primary surplus of 1.5% of GDP is more realistic than 2.2% of GDP. Secondly, in terms of risk, according to the sensitivity badyzes, there is an increase in interest rates above expected levels and thirdly, the fall in the growth rate to levels lower than forecast [19659010]! e, v, n, t, s) {if (f.fbq) returns; n = f.fbq = function () {n.callMethod? n.callMethod.apply (n, arguments): n.queue.push (arguments)}; if (! f.fbq) f._fbq = n; n.pay = n; n.loaded =! 0; n.version = 2.0 & # 39 ;; n.queue = []; t = b.createElement (e); t.async =! 0; t.src = v; s = b.getElementsByTagName (e) [0]; s.parentNode.insertBefore (t, s)} (window, document, "script", // connect.facebook.net/en_US/fbevents .js & # 39;); fbq (& # 39; init & # 39 ;, & gt; 109138906120213 & gt;); fbq (& # 39; track & # 39 ;, "PageView");
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