Greek bonds may soon be included in the European Central Bank’s (ECB) quantitative easing program, Finance Minister Euclid Tsakalotos said on Thursday during a press conference on the results of the Eurogroup meeting, adding that the government will now aim at promoting growth.
Speaking to journalists along with Alternate Finance Minister Giorgos Chouliarakis, Tsakalotos said the Eurogroup meeting ended a crucial circle in the path to economic recovery and although more program reviews will follow, this was the “most complicated, difficult and important”.
This is because Greece completed the fiscal adjustment program and no additional measures will be needed until its end, while the country will receive a loan installment equal to about 2 pct of its GDP to cover state arrears. The conclusion of the review also fulfills three basic conditions for recovery, the minister said: bank recapitalization, improvement of liquidity, restoring of stability and removal of uncertainty for the economy.
“The Eurogroup decision has compromises. We didn’t do what we could have done, obviously we also compromised. But the people will see that the conditions are in place to change the vicious circle into a virtuous circle,” Tsakalotos said.
Commenting on the decisions on the country’s debt, Tsakalotos said for the first time there is an official recognition that it’s unsustainable, noting that if there was a pledge on debt since 2011, then Greece’s financing needs would have been lower by 18-27 billion euros annually.
Asked on the government’s plans towards capital controls, the minister said lifting them will depend on the return of bank deposits and assurance that banks are fully secured. “What we are discussing is the speed with which capital controls will be fully revoked,” he said.
Commenting on when they expect the country to return to the markets, the minister said: “Our aim is to return to the markets slowly, within 2017. We don’t want to exit quickly, but to consolidate a climate of trust,” he said.
He also clarified that the VAT hike in islands will not be revoked. “I’d like to convince ANEL [the gov’t coalition party] and my own party that the revenues can be used for a targeted island policy and as assistance towards citizens for growth. This policy will be more effective.”