ATHENS, Greece – A top European Union official in Greece says the country’s access to bond markets remains “fragile”amid the ongoing financial turmoil triggered by the political uncertainty in Italy.
Declan Costello, who supervises the Greek bailout program for the European Commission, made the cautionary remarks at a conference in Athens on Thursday. Greece is preparing to end its third international bailout program in late August with plans to return to financing itself on bond markets.
“It’s clear that while Greece is coming out of the program – it has tentatively regained market access – that the situation remains fragile,”Costello said.
“And it will be very, very important that Greece continues to demonstrate, not just in the period up to the end of the program, but actually in the critical period after the program, that reforms are on track.”
The government is racing to complete a final list of reforms demanded by creditors over the next three weeks. It needs to do so before it can agree on the terms of post-bailout supervision and receive promised debt relief.
Prime Minister Alexis Tsipras pledged Thursday that the last reforms would be ready to send to parliament for debate by mid-June.
He also voiced optimism that the economy would receive a major boost this year from an anticipated record number of tourists – about 32 million people.
Tsipras’ government has promised more austerity measures over the next two years, starting with deeper pension cuts in 2019. Those measures prompted a general strike Wednesday as well as stoppages and strikes on Thursday that disrupted public transport in Athens.
Greece’s national debt is expected to remain a little below 180 per cent of gross domestic product this year, the worst level in the eurozone.
Separately Thursday, the Finance Ministry announced a decision to further ease capital controls imposed nearly three years ago. It raised the monthly cash withdrawal limit for depositors from 2,300 to 5,000 euros ($2,690 to $5,850).
Daily business limits on payments abroad will be increased from 20,000 euros to 40,000 euros ($23,400 to $46,800).
Capital controls were introduced in 2015 after banks were closed for three weeks in a standoff between the government and creditors in the lead up to Greece’s third successive international bailout.