FinMin: Greece in the ECB’s QE program by this fall
Greece will enter the European Central Bank’s quantitative easing (QE) program “soon,” Finance Minister Euclid Tsakalotos told Bloomberg in an interview on Wednesday.
However, the Greek government’s optimism is not shared by banking sources and analysts, who estimate that Greece’s inclusion in ECB Governor Mario Draghi’s bond-buying program will be tied to the successful completion of the second bailout review in the fall, as well as the progress in talks on settling the problem of the Greek national debt.
In his interview Tsakalotos went as far as to say that Greece will join the QE program by September, stressing that such a development would open the way for the lifting of the capital controls and the gradual restoration of investor trust.
He also said that the ECB will start accepting Greek bonds as collateral for loans after Athens completes the July debt repayments to Frankfurt. “I feel confident the Greek bonds will be eligible” by September, he predicted.
He also forecast that once Greece enters the QE program, depending also on the decisions on the country’s debt, “you can take Grexit off the table,” referring to the possibility of a Greek exit from the eurozone. “Then you have a straight runway for investors,” he added in the same optimistic spirit.
Referring to the new austerity package, Tsakalotos stressed that the impact of the measures will be softer thanks to the increase in confidence, the repayment of the state’s expired debts to the private sector, and the ECB bond-buying program.
“Those factors should outbalance the recessionary drag,” the finance minister stated, adding that once liquidity is restored the government will proceed to the relaxation of the capital controls. “Restrictions on capital controls are already being eased and there is a road map toward full liberalization,” he noted in his interview to Bloomberg, anticipating that Greeks will see the first substantial changes by this fall.
