ECB’s massive bond-buying program is no longer crucial for Greece, prime minister says

6 December 2017
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The Greek government no longer believes that stimulus from the European Central Bank (ECB) is crucial for the economic recovery in Greece.

“I think we will join the (quantitative easing) program but it’s not so crucial for us, as we believed before,” Greece’s Prime Minister Alexis Tsipras told CNBC exclusively Tuesday night.
Greece is ineligible to be considered under the ECB’s stimulus program due to the fact that its debt doesn’t have an investment grade rate from credit rating agencies. However, these agencies might change their grades if Greece successfully concludes the end of the third bailout in the summer and gets its debt restructured.

Previously, the prime minister had said that bond purchasing from the ECB would give confidence to investors to shore up their investments in the southern European country, and thus support the economic recovery.

“Our estimation before the second (bailout) review was that QE (quantitative easing) was key in order to access the market, but it wasn’t true. The developments showed that it wasn’t a precondition,” Tsipras told CNBC, speaking on the sidelines of a conference in Athens.

Greece has tapped the international financial markets twice this year and saw significant interest from investors in both operations. Expectations are that Athens will conduct at least two more market operations before its current bailout is due to expire in August of next year.
“There’s no, for us, goal to access QE before the end of the program,” Tsipras added.

With the ECB slowly scaling back the level of its monthly purchases, it remains to be seen if Greece will end up featuring in the program. At the moment, the ECB has said that its monetary stimulus will remain until September of 2018, though it has left the door open for an extension.

Source: CNBC

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