Bloomberg — Greek bonds will soon become eligible for the European Central Bank’s asset-purchase program, paving the way for an easing of capital controls, and the gradual recovery of investor confidence, Finance Minister Euclid Tsakalotos said.
The continent’s most indebted state is currently excluded from the quantitative easing program, while its lenders have lost access to regular financing lines, as a quarrel between Prime Minister Alexis Tsipras and Greece’s creditors in 2015 raised doubts about its solvency and place in the euro area. The flow of bailout loans keeping Greece afloat is slated to resume this month, after the government committed to additional austerity.
“QE could follow as soon as July’s maturing debt is paid,” Tsakalotos said in an interview, referring to a July 20 payment of notes held by the ECB. “I feel confident Greek debt will be eligible” by September, he said.
Clear Runway
The ECB has signaled it will act when it’s confident the new aid program is on track. After the Governing Council met on June 2, President Mario Draghi said “it will require another policy meeting” but agreed that “there will be a decision leading to the reinstatement of the waiver.”
“Once you have QE, and depending on what your take is on the debt situation, you can take Grexit off the table,” Tsakalotos, a professor of economics at the University of Athens, said. “Then you have a straight runway for investors,” he said from his office overlooking the Greek capital’s main square of Syntagma across from Parliament.
Greek banks will reap benefits from the completion of the country’s bailout review, Bank of Greece Governor Yannis Stournaras said Wednesday according to an e-mailed transcript of his speech at an event in Athens. “ Greek banks are expected to participate in the coming targeted long-term refinancing operation, ” Stournaras said.
