No timeline for Greek inclusion in ECB QE – Draghi

31/8/2016

The European Central Bank is not set to take any immediate decision on including Greece in its bond buying programme as it awaits further clarity on the country’s debt sustainability from eurozone governments, Mario Draghi has said.

Following the ECB’s move to allow Greek banks to access the ECB’s cheap loans earlier this year, Mr Draghi said there was no “precise timeline” on the more significant move to include Greek bonds under the ECB’s stimulus measures that began last March.

Writing in response to a question from a Greek MEP, the ECB president said any moves towards QE inclusion could not be “specified at the current juncture”.

He noted that finance ministers in the Eurogroup were still considering what measures to take to ensure the country’s debt pile is sustainable. In May, the Eurogroup and IMF agreed on a broad but imprecise set of measures to reduce the country’s 180 per cent of GDP debt burden after its current rescue programme ends in 2018.

There are also big questions over the IMF’s participation in any new bailout as the fund will be carrying out its own debt sustainability analysis later this year before deciding whether it will commit any new funds to Greece.

Mr Draghi said:

The Eurogroup noted in its statement of 25 May 2016 that it was considering a series of measures to be implemented in the short, medium and long term, with the aim of bringing debt on a declining path and gross financing needs to sustainable levels.

In the light of the above, a precise timeline for the possible purchase of marketable instruments issued or guaranteed by the Hellenic Republic under the [bond buying programme] cannot be specified at the current juncture.

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