Bank of Greece governor Yiannis Stournaras said in a letter responding to the IMF’s report published on Monday — which proposed among other measures, broadening the personal income tax base and rationalizing pension spending as well as reducing non-performing loans (NPLs) — the IMF’s argument that banks will need an extra 10 billion euros in capital is without explanation.
“Given that the general government’s primary surplus may reach 2 percent of GDP, versus a target of 0.5 percent of GDP, the fund’s fiscal forecasts raise many questions,” Stournaras says, adding the IMF is also very pessimistic concerning future economic developments, including a need to recapitalize banks again.
Additionally, according to the BoG, the achievement of medium-term targets for NPLs would further increase the capital adequacy ratio.
See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!