The European Central Bank should consider Greece’s economic progress when it decides whether to keep granting it funding despite its ‘junk’ credit rating in the coming days, the ECB’s vice-president Luis de Guindos said on Tuesday.
The ECB has been accepting Greek government bonds as collateral and even bought them under its latest emergency stimulus scheme, providing vital support to one of the euro zone’s weakest economies.
This so-called waiver is due to expire in June but the ECB has already indicated it will keep buying Greek bonds as it invests proceeds from its Pandemic Emergency Purchase Program (PEPP) and is expected to continue accepting them as collateral too.
De Guindos told the Banking Summit of Kathimerini’s Money Review website that a decision would come “shortly.”
“My personal opinion is that we have seen a lot of improvement in the Greek economy, both in terms of structural reforms, like fiscal consolidation, and this has been reflected in the decisions of the rating agencies,” de Guindos said.
“I think this is something we should take into consideration…and bear in mind that the Greek economy has made a lot of progress; it’s much more resilient than it was only two or three years ago.”
Ratings agency DBRS Morningstar last week upgraded Greece’s long-term issuer rating to ‘BB high,’ only one notch below investment grade. [Reuters]