Budget Office: Memoranda probably until 2018

Budget Office: Memoranda probably until 2018

Athens, June 10, 2015/ Independent Balkan News Agency

By Spiros Sideris

Probably until 2018 Greece will be in the memoranda assessed the head of the House Budget Office, Panagiotis Liargovas, who spoke before the Commission of Inquiry investigating the conditions under which the country entered these programs.

He also emphasized that an honest agreement with the partners could create a new perspective and give Greece the opportunity to borrow from international markets, something which we can’t do now given the prohibitive interest rates, in order to cover its needs which by 2017 will be EUR 30-40 billion.

MPs’ questions focused mainly on the first memorandum, and whether it was possible or not to restructure the debt before the signing of the loan agreement.

On his part, Liargovas merely provide answers based on his scientific expertise, stressing that the respective governments are those which take into account the facts at the time to make their political decisions and talked about many mistakes in the “recipe” of the first memorandum.

Asked by ND MP Christos Staikouras, “if it was a realistic, feasible solution, the restructuring of debt in 2010”, he replied:

“We understand the difficulties that exist. Whether the restructuring of the debt is politically feasible or unfeasible at the time, it is decided by the respective government. What was the best choice and what was politically feasible at the time, surpasses our own reports”.

“Today the debt sustainability has been strengthened?”, Staikouras went on.

“The fact that its duration has increased and its cost reduced, both help. Beyond that there is a negative. The size of the debt. Yes, there is a benefit from the internal structure, but its level is still dangerous because it seriously burdens current and future generations”, Liargovas replied.

Asked by The River MP Giorgos Amyras if the country can borrow from the international markets and get out of the memoranda, Liargovas noted:

“I wish the country could do that tomorrow morning and get out of the memoranda. We cannot reach out to international markets because the interest rates are prohibitive. If we can’t fund ourselves we will have to borrow because the spreads are very high. By 2017, we will need EUR 30-40 billion to meet our needs. Unless we have endogenous resources, we will necessarily have to borrow that money from abroad. By necessity we depend on international lenders. Until 2017-2018, the country will be in the memoranda, unless there is a change. Maybe another honest agreement with the partners can create the conditions to gradually, because these things do not occur on the short-term, return to the markets. Because the markets have a watchful eye and monitor”.

Asked about the PSI Liargovas replied:

“The restructuring of the debt was a choice of the government. At the time that it happened, rescued the banks, but brought the weight on many pension funds and bondholders. There was a good and a bad.

The fact that care was taken to recapitalize the was good. Beyond that, the big problem in the real economy has to do with businesses. Red loans are a bomb on debt sustainability”.