Greek economy will record higher growth rates under conditions in the near future, Bank of Greece governor Yannis Stournaras estimated in the Monetary Policy Report submitted to parliament.
He also called on Greek banks to speed up their efforts for the reduction of bad loans.
In this context, it is necessary to return to capital markets on sustainable terms. A Eurogroup on debt relief measures, an increase in the cash buffer , as well as a commitment to take further debt relief measures if unexpected, adverse economic developments emerge,will contribute to this.
Stournaras left open the possibility of including Greek bonds in the European Central Bank’s quantitative easing programme and the continuation of accepting Greek bonds as a guarantee for the financing of Greek banks after the end of the programme in August.
Moreover, he estimated that since Eurogroup decisions are linked to enhanced surveillance and conditionality (which are essentially the prerequisites for establishing a precautionary credit line), while ensuring the sustainability of public debt give the ECB the discretion to examine the maintenance of the waiver for the acceptance of Greek bonds as collateral in the Eurosystem’s monetary policy operations. At the same time, they provide the ECB with the discretion to examine the acceptance of Greek government bonds in the securities purchase programme (in the normal period and in the re-investment period).
The Bank of Greece revised downwards its forecasts for the Greek economy, estimating that in 2018 the GDP growth rate will be 2 pct (from 2.4 pct the previous forecast) and 2019 in 2.3 pct (from 2.5 pct).