Greece must regain market confidence as soon as possible and tap bond markets before an available cash buffer is depleted to demonstrate that its economy has emerged from crisis, the central bank said in a monetary policy report on Thursday.
Greece and its lenders have built a 25-billion euro cash safety net for the country, which emerged from its third international bailout in August.
The buffer allows Greece to stay afloat without recourse to financial markets for the next 26 months.
“In no way, however, does this justify complacency,” the central bank said in its report. It added that a sustainable return to bond markets, with regular issuance at low yields, would be the safest indication that the country has put its financial crisis behind it.
Greece tapped bond markets earlier this year and in 2017 but it has not launched a bond sale since exiting its last bailout.
The central bank, which sees Greece’s economy growing by 2.1 percent this year, 2.3 percent in 2019 and 2.2 percent in 2020, said reform implementation must continue with “unwavering resolve” to support growth.
Reforms, it added, were a necessary condition for bolstering the confidence of foreign investors and returning to financial markets on sustainable terms.
Greek government bond yields remain elevated, not only due to turbulence in international markets but also on concerns over a possible reversal of reforms already implemented since 2010, when Athens signed up to its first bailout. [Reuters]