ECB’s Cœuré stresses barriers to Greek QE inclusion

Posted on November 28, 2016

Policymakers at the European Central Bank will have to make a series of judgements about the sustainability of Greece’s debt and the trajectory for its economic growth before deciding on whether to include the country in its bond-buying measures, one of its senior officials has said.

Stressing the hurdles that still exist before Greece can be eligible for the ECB’s quantitative easing measures, Benoît Cœuré, executive board member, said that any decision would be taken “in full independence”.

The ECB has said that any move to buy Greek government debt as part of its stimulus measures would be partially dependent on political decisions made by EU creditors on Athens’ bailout progress.

With the International Monetary Fund due to deliver its verdict on the thorny issue of Greek debt, Mr Cœuré said the ECB would likely carry out its own analysis of the country’s 180-per-cent-of-GDP debt pile before giving any green light for QE.

“The debt sustainability assessment of the institutions are an important input, but they are not the only ones”, said Mr Cœuré, speaking in Athens on Monday.

“The Governing Council will base its assessments also on internal analysis and will take into account other risk management considerations before making its final decision”.

Eurozone finance ministers will be meeting with IMF creditors next month to try and bridge their differences over the level of austerity demanded by Greece’s three-year bailout programme and to pin down measures to restructure the country’s debt after 2018. The IMF has been a fierce advocate of bold debt relief and less stringent budgetary surplus targets for the debtor economy.

In its latest economic outlook, the Organisation for Economic Co-operation and Development joined the calls for debt relief for Greece, arguing its liabilities “undercut confidence in the Greek economy”.

Earlier today, European Commission vice president Valdis Dombrovskis said talks with Greece’s left-wing Syriza government remained “on track”.

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