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Greek central banker expresses optimism over May 24 deal

Xinhua, May 14, 2016 Adjust font size:

Bank of Greece governor Yannis Stournaras appeared optimistic on Friday over the conclusion of a deal between Greece and its international lenders in the upcoming Eurogroup meeting on May 24, the Greek national news agency AMNA reported.

Should the two sides reach an agreement on the next set of measures Athens must implement until 2018 to ensure the disbursement of further bailout loans, he expressed confidence that the capital controls imposed last June to avert the collapse of the Greek banking system will be lifted.

"If we have the agreement on May 24 and everything goes according to plan, then the capital controls will be lifted," Stournaras said speaking to media on the sidelines of an event organized by the Federation of Industries of Northern Greece (SBBE).

"I cannot say when today, and I'm not in the habit of making such predictions. However, when we have a deal, we'll see developments. Prospects are positive. The deal will end a long period of uncertainty and I believe if we implement the agreement soon, we will return to growth," he stressed.

The Greek official underlined that the deal on the conclusion of the first review of the third Greek bailout "should be combined with the launch of substantial talks on initiatives for debt relief."

Stournaras suggested the extension of loan maturities among others and the reduction of fiscal targets to support economic recovery. He referred, for example, to lowering the goal of reaching a primary surplus of 3.5 percent of GDP growth after 2019 to a more "reasonable" 2 percent of GDP.

According to Bank of Greece estimates, in such a case the Greek debt load would drop to 89 percent of GDP by 2035 (instead of 126 percent of GDP without debt relief) and would be undoubtedly sustainable, he argued.

Ahead of the critical May 24 Eurogroup meeting, Athens and its creditors have accelerated efforts to reach a comprehensive agreement and put an end to the uncertainty which drags on after the signing of the new bailout last July. Endit