BUSINESS

Economy reverting to normality

Finance minister, central banker point to return to markets, saying country has regained its credibility

Greece will not need another bailout package, as its economy has been streamlined and the markets are reopening to Athens after four years, Finance Minister Yannis Stournaras and Bank of Greece Governor Giorgos Provopoulos stated on Monday, a day after the government passed a key parliamentary test with the voting on the measures agreed with its creditors.

“Up to the moment, we don’t see a need for a third bailout,” Stournaras said in an interview with Bloomberg Television. “I think the program money, along with the better performance on the fiscal side, are enough to cover us fully for the next 12 months, and under certain conditions that could continue up to well inside 2016.”

Markets are opening again to Greece, Propovoulos told an event in Athens organized jointly by the Eurofi think tank, the Hellenic Presidency of the European Council and the BoG.

“The second round of the credit sector recapitalization will play a crucial role in restoring confidence in Greece and the healthy funding of the economy,” stated the central banker, while Stournaras argued he is “quite confident that the whole of the capitalization needs will be covered by the private markets,” explaining that there is a “huge appetite” for Greek banks in the markets.

Provopoulos went further, asserting that “although the crisis in Greece has been deep, it became the catalyst for the streamlining and the recapitalization of the banking sector, along with the implementation of reforms that will bring considerable yields in the future.”

The central bank governor added that a substantial feature of the Greek crisis has been the vicious cycle of mutual negative impacts between public finances and the credit sector. “From these mutual impacts, a key conclusion has been deduced: namely that an effective economic and monetary union will need to include a banking union as well,” he said.

“The main pillar for the bank union in the eurozone will be the Single Resolution Mechanism (SRM), and in my opinion the negotiations on the SRM have been satisfactory,” added Provopoulos, also a member of the European Central Bank board.

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