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Klaus Regling: Greece will rise to the challenges

The head of European Stability Mechanism (ESM) Klaus Regling in an interview with the Sunday newspaper VIMA expressed his optimism on the prospects of the Greek economy.
Asked on the consequences of the pandemic on EU and the increase of the debt, especially for Greece, he said, among others, that there are weaknesses as a result of the high debt but there are also positive factors that will help Greece to rise to the challenges.

Regling clarified “that there is no comparison with last decade’s economic crisis where serious macroeconomic imbalances should be corrected. Today, we are not facing this problem, there were no macroeconomic imbalances in 2019 in Greece. On the contrary, the financial situation was very strong. It was the third consecutive year with budgetary surplus while the primary surplus of Greece in 2019 was beyond targets” he explained.
Additionally, Regling said “it must be clear that two factors will define the debt’s sustainability in the next decades and these are the growth rates and the interest-rate levels. The growth rates will be positively affected by the NextGenerationEU and will be further supported if the reforms are accelerated and the public investments increase”.

On the condition in the Greek banking system, he said that “the banks today are in a better condition in comparison with the previous five or ten years and this is positive, but we have not yet reached the end of the road, quite the opposite! The progress is substantial and should continue, Regling underlined.

Finally, he noted that the “existing stability pact needs to be reviewed and we will begin working on it in 2021”.

Source: ANA-MPA