ECB Official: Putting Off Reforms Could Complicate Bailout Review

Sunday, September 17th, 2017
Last Update: 17:59
Benoît Cœuré, member of the ECB Executive Board; Yannis Stournaras, Governor of the Bank of Greece; and Francesco Drudi, ECB Country coordinator for Greece.

The Greek government should not put off agreed bailout reforms or it could “complicate” an upcoming bailout review by its foreign creditors, a European Central Bank official said.

The third bailout review is expected to begin in October with bad loans, the 2018 budget, the energy market and privatizations among the main issues, the ECB’s mission chief in Greece, Francesco Drudi, told Proto Thema Sunday newspaper.

“If any major backtracking or delays occur in the implementation of the key deliverables due so far, this could complicate the completion of the review,” Drudi said.

“Unfortunately, a number of parliamentary bills adopted after the conclusion of the second review may not be in line with program commitments and will have to be assessed by our teams,” he said.

Greece has two remaining bailout reviews and Drudi said it should aim to complete at least one between now and the end of the program to create momentum.

“With regard to the post-program period, we fully understand the government’s desire for a clean exit,” he said. A “clean exit” would mean Greece emerging from its latest bailout without further conditionality.

“This will require a lot of effort to convince markets, investors and depositors that the momentum for reform will not abate and that no reversal of actions taken during the program will occur.”

Drudi said he expected Greece’s fiscal targets for the year were “still within reach”. “As far as next year is concerned, we do not have enough elements to assess the risks of a potential negative carry-over to 2018,” he said.

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