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Stournaras Calls for Greek Debt Relief, Lower Primary Surplus

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FILE- Bank of Greece Governor Yannis Stournaras. (Photo: Eurokinissi/Giorgos Kontarinis)

ATHENS - Bank of Greece Governor Yanis Stournaras said the country’s creditors must grant debt relief in some form and lower the primary surplus targets after 2020 or it won’t qualify for the European Central Bank’s asset-buying program.

Addressing industrialists in northern Greece, Stournaras said that Greece’s budget primary surplus targets should be maintained at 3.5 percent up to 2020 and be lowered to 2 percent of GDP after that period, Reuters reported. The country’s current international bailout expires in 2018.

“The [suggestions] mentioned above will open the way for inclusion of Greek bonds in ECB’s quantitative easing program, which will consequently facilitate access to debt markets and support economic recovery,” Stournaras said.

IMF Managing Director Christine Lagarde on May 12 called for more specific debt relief measures to be spelled out by European creditors, part of her agency’s standing demand that the Greek debt's "sustainability" is ensured while insisting the IMF be repaid in full for its participation in two first bailouts of 240 billion euros ($262.4 billion)

The IMF has made debt relief a condition for its return to the current Greek program - the third consecutive bailout, this one for 86 billion euros, some ($93.4 billion.

"We will carry on working on this debt relief package...There is not enough clarity yet but I hope that the European partners will continue to progress in that," she said on the sidelines of a G7 finance ministers and central bankers' meeting in Bari, Italy, ahead of a G7 summit.

“There is not enough clarity yet but I hope that the European partners will continue to progress in that,” she said, according to Agence France Presse.