The incoming economy minister, Yannis Dragasakis dismisses calls for Greece to request a precautionary credit line upon completion of the current fiscal adjustment programme in August.

Bank of Greece Governor Yannis Stournaras has issued repeated calls for the government to accept such an arrangement, as it would facilitate the country’s return to the markets.

“The discussion of a preliminary line is not a solution,” Dragasakis told, in an interview conducted on the eve of his appointment as minister.

“Borrowing from the ESM (European Stability Mechanism) will always be cheaper than the country borrowing from the markets. Does that mean that we should remain in perpetuity under bailout memorandums and supervision?” he said.
Dragasakis believes the discussion on how the country will exit the programme is over, and in this regard he cites the decisions of the June, 2017 Eurogroup meeting.

“I do not get the sense that either the European Central Bank or the IMF supports a precautionary credit line,” he said.

When asked about the stated position of the Bank of Greece, Dragasakis said that the government “does not comment on independent authorities”.

“If it appears that the choices of the Bank of Greece are not objective, however, an issue might arise,” he underlined.

Non-performing loans

“There is an arsenal of new tools for reducing non-performing loans (NPLs),” Dragasakis said, while further noting that the government does not rule out the creation of a bad bank, if it turns out that the rate at which NPLs are being reduced must be expedited.

Dragasakis noted that Syriza’s electoral programme called for the creation of an “intermediate NPL management mechanism”, which was scuttled by the fiscal terms set by creditors.

Development Bank

On the other hand, the new minister of economy and development believes that the time is ripe for the establishment of a Greek development bank, which would coordinate existing and new funding tools and serve as an anchor for attracting international capital.