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ESM Chief: Greece Can Emerge Successfully From Bailout Program

Greece, although it remains a special case, can emerge successful from the bailout program, as happened with Portugal and Cyprus” said President of the European Stability Mechanism Klaus Regling.
The ESM head expressed this view in an interview in South China Morning Post published on Sunday. According to Regling, four of the five countries that received ESM support are already success stories: Ireland and Spain are among the countries with the highest growth in Europe. Portugal and Cyprus have also exited the rescue programs.
According to Regling, the ESM, like the International Monetary Fund, provide financial assistance under strict conditions, in a “cash in exchange of reforms” approach.
ESM provides loans with very long maturities and favorable conditions that allow ample financial breathing space. For example, Regling said, Greece saves 8 billion euros per annum under the concessional lending terms. At the same time, he noted, the debt relief short-term measures will reduce the debt / GDP ratio by 20 percentage points by 2060.
The non-participation of the IMF would constitute a fundamental change
Regling also spoke on Bloomberg television saying that if the IMF does not participate in the current Greek program, as intended from the beginning, it would be a fundamental change in the program and it would require the approval of the German parliament. Last week German Finance Minister Wolfgang Schaeuble said that a new program for Greece should be negotiated if the IMF does not participate.
The ESM head also said that the implementation of short-term measures to alleviate the Greek debt will start within the next few days.
Regling said that European institutions want the IMF participation because the Fund was crucial in the formulation of the program, adding that “we have cooperated with the IMF during the crisis” with success in other programs, such as Ireland, Portugal and Cyprus. Furthermore, the ESM chief said that the IMF participated in Greece’s first two bailouts, but has not yet agreed to participate in the third program.
Regarding the progress of the program, the ESM official admitted that there is no agreement yet on the completion of the second bailout program review. However, he said, the fact that there is significant progress cannot be ignored. He also noted that so far ESM has financed Greece with 31 billion euros.

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