The Strategist

Greece refuses EC’s financial assistance

04/27/2018 - 16:10

Greece can withdraw from the third program of financial assistance without a reserve credit line and without new measures of austerity, said Prime Minister Alexis Tsipras.

Speaking at a joint news conference with the head of the European Commission Jean-Claude Juncker in Athens, Tsipras said that Greece does not intend to abandon the reforms and is on the way to achieving its financial goals for 2018-2020.

He said that Athens and European lenders are also close to an agreement to create a structure to reduce the country's huge debt burden.

President of the European Commission Jean-Claude Juncker, in turn, agreed with Tsipras that there would be no need for an additional credit line to Greece. The head of the EC also noted achievements of Greece in terms of carrying out reforms in exchange for financial assistance.

"We want to make every effort to ensure that Greece's exit from the rescue program is clean and that there will be no warning (credit) line," Juncker said after meeting with Tsipras.

The head of the Greek central bank in late February said that Greece will need a financial "safety net" after the program of financial rescue of the country ends in August.

Greece received 260 billion euro in financial aid from 2010, and the third phase of the program will end in August 2018.

Athens, seeking to show that they can already access the debt markets, this month already attracted 3 billion euro from the sale of bonds with a maturity of 7 years.

However, some EU policy makers believe that Greece will not be able to cope without a reserve credit line.

The head of the Central Bank of Greece, Yannis Stournaras, speaking at the annual meeting of shareholders of the central bank, said that the prudent support program will help the financing process of Greece.

"International experience has shown that testing the market to create a liquidity cushion before the end of the program creates an atmosphere of trust and opens the way for the country to exit the program," Stournaras said.

"Nevertheless, we should separately consider a program of prudent support," he added. According to him, it will reduce borrowing costs for Greece and will provide the government and banks with access to loans after the completion of the financial rescue program.