Greece’s new government, led by Prime Minister and Radical Left SYRIZA leader Alexis Tsipras is sending “very mixed signals” over its international bailouts and could be excluded from a European Central Bank bond-buying plan.
ECB Governing Council member Bostjan Jazbec said it’s too soon yet to see how the situation will be handled as the institution waits to see what Tsipras would do.
The Premier had vowed to renegotiate the austerity measures that came with two bailouts of 240 billion euros ($272 billion) from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) or walk away from at least half the debt, unsettling the Eurozone.
“Our concerns and hopes are related to how the Greek government will understand the situation and react to it,” Jazbec said in an interview in Ljubljana with the Bloomberg news agency. “It’s too early to directly answer questions on when and how the ECB can buy Greek government bonds.”
Tsipras said Greece should be included in the so-called Quantitative-Easing (QE) program designed to help struggling economies but at the same time doesn’t want to adhere to Troika terms over reforms and while Greece wants debt relief.
“Let’s wait and see how the Greek government will comply with all the requirements they have to fulfill and how this will affect the whole financial situation,” said Jazbec, 44, who also heads the Slovenian central bank. “There are very mixed signals from the Greek government on how they want to proceed with the program and with the reforms.”
ECB Executive Board member Benoit Coeure said on Jan. 29 that the central bank can buy Greek bonds, even though they are below the minimum investment-grade rating that is in principle required, as long as the country remains in an economic- adjustment program, which Tsipras doesn’t want to do.