Draghi signals Eurogroup decisions not enough for Greece’s QE eligibility

Tuesday, June 27th, 2017
Last Update: 10:30
In a letter to a Greek MEP published yesterday, ECB President Draghi signaled that the debt decisions announced by the Eurogroup on 15th June do not provide enough clarity to justify the inclusion of GGBs in the ECB QE program. Mr. Draghi contended that the debt-related decisions are still “insufficient to assess both their quantitative effect and the timing of their impact on debt dynamics”. In this respect, the ECB President suggested that there remain serious concerns regarding the sustainability of Greek debt given the lack of clarity on the debt relief front.

By implication, Mr. Draghi stressed that the ECB is not in a position to “complete a fully-fledged DSA analysis of Greece’s public debt.”

Irrespective of the QE inclusion, the Greek govt is reportedly eyeing three potential windows of opportunity for tapping credit markets until the end of the program: in July, in Sep/Oct (i.e. after the German elections) or alternatively by year-end (or beginning of 2018).

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