Talk of a precautionary credit line ‘not a solution’, Dragasakis says

“The talk about a precautionary credit line is not a solution. It merely postpones the problem until the future,” government vice president and newly appointed Economy Minister Yiannis Dragasakis said in an interview with on Thursday. “Borrowing from the European Stability Mechanism will always be cheaper than the markets. Does this mean that we should be stuck with memoranda and surveillance indefinitely?” he added, speaking about the challenges facing Greece in the transition to the post-memorandum era.

According to Dragasakis, the discussion on how to exit the programme was closed and he pointed to the decisions of the June 17 Eurogroup. “I do not have the feeling that either the European Central Bank or the International Monetary Fund support a precautionary credit line,” he said, adding that the wider political system was not against a ‘clean’ exit.

He said that there was an arsenal of new tools for the reduction of non-performing loans and did not rule out the “possibility of a bad bank, if the reduction of NPLs needs to be accelerated.”

The new economy minister estimated that the conditions are now mature for the establishment of a development bank, noting that it would become the coordination body for existing and new financing instruments, as well as an anchor for attracting foreign investments.