Bank of Greece Governor Yannis Stournaras has warned that only if Greece implements the commitments [to creditors] that it has undertaken will the markets “give us a chance”.
In an interview with the Financial Times, Greece’s central banker stressed that the country must be more ambitious in handling Non-Performing Loans (NPLs).
As for the post-bailout period, Stournaras underlined that, “From the moment that we are alone, the markets will adopt a tough stance.”
“They want to see how we will behave after 20 August [the end of the bailout programme]. They will monitor every move of the government’s economic policy. If they think that we are backpedaling, they will leave. If they feel that we are meeting our commitments, they will give us a chance,” he said.
As the FT article states, Stournaras’ warning reflect the concerns that Greek politicians will be pressured to reverse commitments and reforms, as the country draws nearer to elections, which are expected in October, 2019, at the latest.
On that score, Stournaras said that Greece’s leaders must ensure that the country will never again end up in a similar situation. “The least that one expects is for the political system to have learned from its mistakes and not repeat them,” he said.
Regarding Non-Performing Loans, Stournaras said that, “We need to be more ambitious in reducing NPLs. Banks must pursue more intensive sales of NPLs, and exert greater pressures on those who can pay and do not.”