The failed negotiations and mishandlings on the part of the Greek government in the first six months of 2015 cost the economy 100 billion euros, European Stability Mechanism Klaus Regling said.
In an interview with Skai television on Thursday, the ESM head said: “I know that the Greek Central Bank has published this figure as being 83 billion or more. I know that some consider that the cost is even higher when they count lost revenues from growth prospects. It may be a little less, it may be a bit more. I think 100 billion is a round figure that is probably correct,” he noted.
In addition, Regling implied that the Greek government cultivated excessively high expectations on Greek debt relief. Asked why, while the Greek government was expecting more from the recent Eurogroup, this eventually did not happen, Regling said that, “I do not know exactly what the narrative here is. Perhaps the expectations were too high. In my view, the June 15 Eurogroup followed the generous way of the Eurogroup statement in May 2016, where the possible measures for debt were clarified in a quite well-worded way.”
Regarding the Greek government’s expressed intent to try to borrow from the markets before the end of the year, Regling suggested caution: “I believe that after so many years of absence from the markets it is right to go back in slow steps. The debt management agency that is responsible to monitor Greece will analyze carefully and very professionally when it will be the right time to go to the markets. It depends on the state of the Greek economy, the reforms and the state of the markets,” Regling said.