Greece has the ability to use the remaining 11.5 billion euros from its bank rescue fund as a preventive support line when it exits its European Union / International Monetary Fund (IMF) bailout program, Bank of Greece (BoG) Governor Yannis Stournaras said in an interview to Greek newspaper “Ta Nea” today.
“The fact that the European Central Bank‘s stress tests showed that Greek systemic banks do not lack capital, gives the Greek economy the opportunity to make use of the 11.5 billion euros of the Hellenic Financial Stability Fund (HFSF) with greater complacency and flexibility,” Stournaras underlined in his interview.
According to the BoG Governor, “the largest part of this amount could be used as a preventive support line returnable to the European Stability Mechanism (ESM). That way, it remains available in case it is needed either for the banking system or the wider needs of the Greek economy. It equally reduces the national debt as long as it is not used. Finally, since it reduces the debt, it enables the Greek government to negotiate a realistic relaxation of the primary surplus target for 2016, aiming at the overall benefit of the Greek economy and Greek society.”
The Greek side, who is currently in talks with EU and IMF institutions, desires to exit its bailout program way ahead of schedule, on December 31, while the IMF plans to stay in the country until early 2016. The preventive credit line would serve as a cushion in the event that Athens encounters difficulties in funding itself from markets, while the Greek government tries to avoid strict and unpopular austerity measures in case of a new support program. However, as Reuters reported, bond markets appear nervous in regards to the uncertainty surrounding the future of the bailout program.