ATHENS — Greece is moving ahead with its programme to recover from the economic fallout of the pandemic even before initial funding arrives from the European Union, Finance Minster Christos Staikouras said.
“We are among the first countries to submit our programme and we’ve already started to implement some of the reforms and investments,” Staikouras told Bloomberg in an interview in Athens. Rather than waiting for the initial disbursement of EU funds expected by the end of the summer, Greece is “covering initial costs with our own resources,” Staikouras said. The government is betting its recovery plan will help the country overcome “the large investment gap observed during the financial crisis years, which deteriorated further during the pandemic,” the minister added.
Once normal conditions have been reestablished, “our intention is to continue a prudent, balanced and sound fiscal policy, which includes permanent reductions in taxes and social insurance contributions,” Staikouras said. Still, he made clear that Greece will at the same time have “reasonable” primary surpluses in the future. “The Greek government will take all the necessary initiatives and make all necessary decisions to preserve and improve, in all aspects, the current status of all its government securities,” Staikouras said. The ECB acted properly in dealing with the pandemic and with Greece, “which is something that we are pretty sure will continue,” the minister said. “It is highly likely that some systemic banks will reach a single-digit NPE ratio by December 2021 and all systemic banks in 2022,” Staikouras said. The government could consider introducing another systemic solution, such as the creation of a bad bank as the Bank of Greece has proposed, “only after taking into consideration the remaining stock of NPLs, along with possible fiscal implications,” the minister said.