ESM urges Greece to stick to reforms

Greece must commit to implementing reforms in order to shield itself from external risks as it emerges from its third international bailout, the chief economist of the eurozone’s rescue fund said in an interview published yesterday. “As Greece enters the final months of its ESM program it is crucial that it remains determined in implementing the remaining reforms and in staying the reform course after the program ends,” the European Stability Mechanism’s (ESM) Rolf Strauch told Greek newspaper Naftemporiki. Greece has signed up to three international bailouts since 2010, when its debt crisis broke out. Its current rescue program, which includes policies prescribed by its European Union and International Monetary Fund lenders, ends in August. Asked whether Greece was ready to fund itself only through markets, in an environment of increased risk due to political developments in Italy, Strauch said that investors “have honored Greece’s reform efforts,” citing previous bond issues. But he warned that countries exiting a bailout program “are vulnerable to external events.” “There is no magic number for the ‘right’ yield. It is a process,” he said. “The best thing Greece can do now is to demonstrate strong reform ownership and to clearly signal that the successful reform course will be continued.” Strauch said the ESM “has been working very hard so that the IMF can still activate its program,” even last-minute. “We hope that the IMF can come on board during the final stretch of the ESM program,” he said.