ECB chief Draghi rules out Greece joining QE soon

The president of the European Central Bank, Mario Draghi, said yesterday that Greece will not join its quantitative easing program (QE) until international creditors specify what sort of debt relief measures the country can expect.

“Until sufficient details are given on debt-related measures, serious concerns remain about the sustainability of Greek government debt,” he said in response to a question from Popular Unity (LAE) MEP Nikos Hountis over whether the ECB had completed its own debt sustainability analysis (DSA), and if it had come to any conclusions on the issue.

Draghi said that ECB experts “are not currently in a position to complete a fully fledged DSA analysis of Greece’s public debt.”

Up until very recently, Greece was banking on its inclusion in QE as a way to return to bond markets, which would put an end to its dependence on bailout programs.

If the ECB were to buy Greek debt it would boost the confidence of investors about the prospects of the Greek economy.

But given Draghi’s comment yesterday and the failure of the government to secure more concrete language on debt relief at the Eurogroup on June 15, Athens now believes it can achieve the goal to enter bond markets without having to join QE.

And it believes that it has three windows of opportunity to issue a bond in the period stretching from July until early next year.

These three opportunities are, reportedly, in July, given the improved climate in international markets. The second chance will be at the end of September and beginning of October after German elections, while the third will be at the end of the year or early 2018, as predicted by the head of the European Stability Mechanism (ESM), Klaus Regling.