Even as Greece looks likely to need a third bailout and its debt has risen in the last 15 months, European Central Bank President Mario Draghi, whose institution is one of the country’s Troika of international lenders, said he believes it is sustainable, even at $434 billion, without explaining why or how and as many analysts insist it’s unsustainable.
Draghi said it’s too early to say if Greece, which is surviving on two bailouts of $325 billion from the European Union-International Monetary Fund-ECB, will need more aid. He said it would depend on factors such as it having access to capital markets. Greece has been locked out since needing the first bailout in 2010 and after stiffing investors with 74 percent losses in 2011.
Talking to the European Parliament, he said that the ECB is ready to offer Eurozone banks more long-term loans to keep money market interest rates from rising to levels which could push inflation too low.
The Italian banker added that credit volumes are not yet showing the effect of the improvement in banks’ funding conditions, noting that the 17-country bloc’s central bank remains committed to keeping interest rates low for as long as necessary.
German Chancellor Angela Merkel, whose country is the biggest contributor to Greek bailouts only on the condition of harsh austerity measures, said immediately after winning re-election in a landslide that she will keep her boot on Greece’s neck and push for more reforms, although it was not stated if that will eventually include confiscating part of Greek bank accounts as the Troika forced Cyprus to do in return for aid there.
The man she defeated easily, Peer Steiinbrueck, leader of the SPD, stated that the new aid towards Greece will be an issue of the negotiations with CDU in order to form a coalition government with her.
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