SSaam­maar­raass ccoon­nf­fi­id­deen­ntt aafft­teerr bbaannkki­in­ngg sst­tr­reessss tteessttss

Financial Mirror (Cyprus) - - FRONT PAGE -

The pos­i­tive re­sults of the Euro­pean Cen­tral Bank stress tests on Greek banks prompted An­to­nis Sa­ma­ras to say, “step by step, and on a steady ba­sis, we are com­ing out of the cri­sis… a new Greece is born, proud, eco­nom­i­cally strong, and just.”

The coali­tion gov­ern­ment is op­ti­mistic that the econ­omy will be boosted as there will be more liq­uid­ity in banks, al­low­ing for much-needed lend­ing to strug­gling busi­nesses. This will lead to the am­bi­tious tar­get of 2.9% GDP growth the gov­ern­ment has set. At the same time, the re­sults of the ECB stress tests will leave the 11 bln euros of the Hel­lenic Fi­nan­cial Sta­bil­ity Fund at the gov­ern­ment’s dis­posal to use as they see fit.

The 11 bln euros can be used as a cush­ion in case Greece ex­its the bailout pro­gramme early but can­not cover the 2015 bud­get short­falls by bor­row­ing from the in­ter­na­tional mar­kets.

It can also be used to pay a por­tion of the sov­er­eign debt, thus bring­ing it down by a few per­cent­age points and mak­ing it sus­tain­able, as the debt cur­rently stands at a to­tal of 320 bln euros. How­ever, the troika eval­u­a­tion in Novem­ber will in­clude thorny is­sues that will hardly be re­solved by then. The re­forms the troika wants on “red” loans, salaries in the pub­lic sec­tor, changes in labour laws, new union leg­is­la­tion and re­tire­ment funds are not easy to be im­ple­mented. Es­pe­cially with Sa­ma­ras push­ing for an early exit from the bailout pro­gramme.

There­fore, it is cer­tain that Greece will re­main un­der some sort of watch from its cred­i­tors. What the prime min­is­ter is hop­ing to achieve is to put an end to aus­ter­ity mea­sures and ne­go­ti­ate a new agree­ment that will have a dif­fer­ent name than the much-loathed “mem­o­ran­dum.”

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