Central Bank Proposes Post-Bailout Support Programme for Greece



Bank of Greece governor Yannis Stournaras, is worried about a potential gap in Greece’s funding after the country’s apparent exit from the existing bailout programme.

The bank published a report on Thursday, saying that the country’s foreign creditors need to clarify whether the country will benefit from a support programme after its bailout expires next August.

The bank said that a “precautionary support framework,” would help boost investor confidence and drive down borrowing costs, assisting an economy that is gradually returning to growth after losing about a third of its value, over the last seven years.

“To consolidate confidence over the medium term, it is equally important to clarify the form that post-programme support to the Greek economy will take,” it said in a scheduled report on monetary policy.

The central bank said a “precautionary support framework” would, however, help boost investor confidence and drive down borrowing costs, assisting an economy that is gradually returning to growth after losing about a third of its value over the last seven years.

“To consolidate confidence over the medium term, it is equally important to clarify the form that post-programme support to the Greek economy will take,” it said in a scheduled report on monetary policy.

It added that the focus of economic policy should be on tackling the problem of banks’ non-performing loans, removing obstacles to investment and addressing a public debt overhang.

“These actions would facilitate the return to financial normality, the full abolition of capital controls and the sustainable recovery of the economy after eight years of sacrifices.”

The bank reiterated its growth projection for this year. It said the economy is expected to grow by 1.6% in 2017, 2.4% in 2018 and 2.5% in 2019.

Source: Reuters


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