The European Central Bank is looking forward to working with Greece to complete a review of its bailout, but time is running short, ECB executive board member Benoit Coeure told a Cypriot newspaper on Sunday.
Greece and its eurozone partners struck a deal last month to extend its bailout program by four months. The cash-strapped country has until April to detail reforms that it will implement and to successfully conclude a bailout review before it receives any further aid.
“The (Greek) authorities have committed to fully cooperate with the three institutions (the European Central Bank, European Commission and International Monetary Fund), in order to allow for a speedy and successful conclusion of the review,” Coeure told the Politis daily newspaper in an interview.
“We are looking forward to working with the Greek authorities. Time is running short,” he said.
Coeure said once the review was successfully concluded, a follow-up arrangement would be discussed with the euro zone finance ministers, if the Greek authorities wished.
“But it is first and foremost the responsibility of the Greek government to create growth and regain financial independence,” he said.
Shut out from international markets and with international aid frozen against a backdrop of falling tax revenues, Greece is running out of cash.
The ECB last month also stopped normal lending to Greek banks by refusing to accept low-rated Greek government bonds as collateral, adding further pressure to domestic lenders which were forced to draw emergency liquidity assistance (ELA) from the country’s central bank.
Echoing ECB President Mario Draghi’s comments on Thursday, Coeure said the eurozone’s central bank will resume normal lending to Greek banks when it sees that the Greek program review would be successfully concluded based on the outcome of the country’s discussion with its creditors.
“I hope this will be the case soon, when these discussions have made progress,” he said.
Asked whether a possible failure of the Greek program would eventually undermine the future of the euro area, Coeure defended fiscal adjustment in the country.
“The arduous efforts of the Greek people need to be recognized here. But let’s not fool ourselves: adjustment was inevitable and, believe me, it would have been much worse without European and international support,” he said.