FinMin Tsakalotos: Markets have recognised that Greece has turned page

The markets have recognised that Greece has turned page, Finance Minister Euclid Tsakalotos said at the Economist conference on Thursday.

Tsakalotos estimated that the decision of June 15 Eurogroup will pave the way for private investments in Greece.

Referring to the return to the markets, he said that “this can be done with or without the QE.” However, he added that “there are not many Greek bonds for the ECB to purchase; it would be good for the banks but I do not consider it very important. It is useful and important but most of all it is symbolic.”

Regarding the primary surpluses, the minister said that “the target of 3.5 percent of GDP is too high, but we had no other choice. The 2 pct of GDP is close or a little better than what we expected, it is in the European context, as part of the Stability and Growth Pact.”

Tsakalotos said that “there is evidence to set a good story of success for Greece” and described the IMF’s position for 1 pct growth in the long run as “a little strange.”

He said that in the medium-term fiscal strategy “priority has been given on 3.5 billion euro tax cuts. He added that “in the medium term, we need to ensure that growth is sustainable and the government’s view is that we can get out of the crisis without going back to 2008.”

On his part, the chief of the European Stability Mechanism Klaus Regling said that ESM will disburse 7.7 billon euros out of 8.8 billion euros next week.

He pointed out that the process of fiscal adjustment for Greece has now been completed with the measures voted by the parliament.

If the reforms are implemented, he added, it is possible to return to the markets before the end of the programme – at the end of 2017 or early 2018 – as Greece has the potential to become a new success story.

Regarding growth, Regling noted that “everything depends on policies. With proper policies, growth can be higher than forecast.

On the second programme review, the head of the ESM said that even though it was concluded later than expected, it is worth congratulating “the Greek citizens and the Greek authorities” for what they have achieved.