If Greece continues to implement the reforms included in its adjustment program the country could become the “fifth success story” of the European Stability Mechanism (ESM), its head, Klaus Regling said on Wednesday at the Institutional Money Congress in Frankfurt, in a speech titled “The ESM and Euro Area Financial Stability.”
“If Greece continues to implement the reforms, I am optimistic that the country can become our fifth success story, when the ESM program ends this August. If the government stays on course, it should be able to regularly refinance itself independently on the market,” he said, in a reference to the other four countries -Ireland, Portugal, Spain and Cyprus- which successfully completed their ESM programs.
“Greece has already taken steps in this direction. It raised 3 billion euros by issuing an oversubscribed 7-year bond just three weeks ago,” he added.
Regling reiterated that the euro area countries have promised to continue to stand by Greece’s side and the euro finance ministers have raised the prospect of providing further debt relief at the end of the program, if it is needed. “This could involve additional EFSF maturity extensions or the transfer of profits made from central banks’ buy up of Greek bonds on the secondary market,” he explained.
He also expressed the view that the reform efforts made by the country – in terms of salary and pension cuts or the reduction of employees in the public sector – “are not always appreciated enough in Germany.”