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Greece May Need Less Than 86 Billion Euros, Says Klaus Regling

Klaus ReglingThere will be no shortage of funds for Greece if it proceeds with reforms, said Klaus P. Regling, Chief Executive Officer of the European Financial Stability Facility and Managing Director of the European Stability Mechanism in an interview to the Swiss daily Neue Zurcher Zeitung.
Mr. Regling expressed his confidence that the bailout review will be completed by May and stressed that the funds are there for Greece when it does what it is supposed to do.
“Greece has…come into calmer waters, compared to a year ago, when the government had tried something new, which was a big step backwards…” said the German economist and CEO of the European Financial Stability Facility and Managing Director of the European Stability Mechanism.
In addressing the question of the delay in the completion of the bailout review, Mr. Regling referred to the pension reform issue as the main stumbling block in the negotiation talks between Greek officials and the representatives of the quartet institutions serving as the country’s official lenders.
Mr. Regling acknowledged that the problem of pension reform is quite complex and difficult since people had been promised benefits which now must be substantially reduced.
Nonetheless, Mr. Regling said pension reform must proceed uninterrupted as the Greek government “believes that the current pension system will be bankrupt in a few years at the latest, which is why they certainly see the need to reform the system.”
As with many other EU leaders, the CEO of the European Financial Stability Facility and Managing Director of the European Stability Mechanism said that there is no link between the Greek debt crisis and the refugee crisis.
In saying so, Mr. Regling stressed that whatever help is provided to Greece in connection with the refugee crisis the country is currently facing will not be linked to the financial support provided as part of the bailout program.
“The funds for the refugees will be part of a separate budget… and need not be paid back,” said Mr. Regling.
Asked if the debt with which Greece is being saddled as a result of the bailout programs are unfair to future generations as the repayment of loans will affect future government budgets for many years to come, Mr. Regling said that this is not an appropriate way to look at the issue.
“We require very low interest rates… and this saves the Greek government a lot of money,” Mr. Regling went on to add.
Mr. Regling also said that Greece will not require the entire 85 billion euros that are part of the new bailout agreement.
“The country may need no more than 60 billion as of the end of 2018,” Mr. Regling said, but emphasized that the liquidity needs for Greece are assessed regularly and much depends on the condition of the global economy.
(Source: Neue Zurcher Zeitung)

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