ECONOMY

Regling says debt is still sustainable

regling-says-debt-is-still-sustainable

The Greek state debt may be high but it remains sustainable, the head of the European Stability Mechanism Klaus Regling reiterated on Thursday, stressing that the increase of budget deficits and debt in eurozone countries has been the right response to the pandemic.

Speaking at the Delphi Economic Forum, the ESM managing director said that the decisive factors for the debt to remain sustainable are the consolidation of strong economic growth through the best possible utilization of resources from the Next Generation EU fund, combined with the “right message” from the government to the market with the continuation of reforms.

Under all conditions Greece will continue to service its debt normally for many years, assured Dimitris Tsakonas, the Public Debt Management Agency chief, after stressing that the country’s annual financing needs will remain at perfectly manageable levels for decades, and that during the pandemic Greece has had the opportunity to construct a bond yield curve.

Tsakonas told the same event that the cash reserves of 33 billion euros suffice for the unhindered servicing of the national debt over the next three to four years at least, even if the state doesn’t borrow a single euro from the markets.