Η Greece has already started the implementation of some reforms and Investment of recovery plan, covering the cost with its own resources until the EU approves it and the first disbursements are made by the EU, the finance minister said, Christos Staikouras, in an interview with Bloomberg.
«We are among the first countries to submit our programme and we have already started to implement some reforms and investments». The goal, he said, is to rebuild the country by shaping a more outward-looking, resilient, fair, digital and green economy.
«Reasonable» primary surpluses after the return to normal conditions
Referring to the post pandemic era, the minister said that when we will have returned to normal conditions «our intention is to continue a prudent, balanced and sound fiscal policy, which will include permanent reductions in taxes and social security contributions». At the same time, he added, Greece will have «reasonable» primary surpluses in the future.
Single-digit rates of «red» loans in 2022
The Minister expressed optimism that by extending the Hercules plan for the next 18 months, banks will drastically reduce their bad loans. «It is very likely that some systemic banks will have single-digit NPEs (non-performing exposures) at the end of 2021 and all systemic banks in 2022,» the minister said.
As regards the proposal of Bank of Greece on the creation of a «bad bank» that will take the red loans, Mr. Staikouras said that the government could consider «only after taking into account the stock of NPLs (non-performing loans) that will be left and the fiscal impact».
The ECB will continue its bond purchases
The Minister expressed confidence that the European Central Bank will continue to purchase Greek bonds under its emergency programme (PEPP). The ECT, he said, acted correctly regarding the pandemic and Greece, «which we are quite sure he will continue to do.».
Regarding the time still needed until Greek bonds acquire an investment grade rating and the ECB can buy them even after the expiry of the PEPP, the minister said that «the Greek government will take all the necessary initiatives and all the necessary decisions to maintain and improve, in all respects, the current status of all government securities».
