tommy271
Forumer storico
IMF: Greek Debt Looks Sustainable At Present
FRANKFURT (Dow Jones)--Greece looks poised to avoid a restructuring of its debt though the International Monetary Fund remains ready to provide further aid to the country if requested by the government, an IMF official said Thursday.
"At this point, on the basis of our program, we think that Greece should be [headed] in the right direction to a position where its debt is sustainable. Under those circumstances, there΄s no need for any type of restructuring," said Antonio Borges, director of the IMF΄s European Department.
Borges said the IMF doesn΄t expect any kind of sovereign default in Europe at present, though he said he doesn΄t believe in "a miraculous restructuring solution," for Greece as suggested by some European politicians and market participants.
The IMF in June will be able to update its view on the pace of Greek reforms, following an ongoing investigation by the fund, Borges said.
As part of the country΄s reform efforts, the country has undertaken a EUR50 billion privatization program, which Borges said potentially represents only around 20% of total government-owned assets that could be sold off to raise cash.
"Greece is a special case because it is a real outlier, it is a government that has an extraordinary portfolio of assets," he said.
Greece could sell around EUR280 billion alone in real-estate assets, he added, but cautioned that privatization would take time and would be complicated by issues like local politics and labor unions΄ interests.
"We are not saying this is easy to do, we are saying this can be done over time," Borges said.
Separately, Borges said Spain had made excellent progress in restructuring its banking system over the past year, which he said was reflected in the market reaction to the country΄s banking system. Spanish banks΄ overall exposure to Portugal is limited and contagion risk from its Iberian neighbor isn΄t a major concern at present, Borges said.
More broadly, European banks still need to boost capital levels, although systemic risk for the European banking system has fallen over the past year. Plenty of capital is available for banks to boost their balance sheets, Borges said, as evidenced by a slew of recent capital increases by Italian lenders.
Borges said the IMF doesn΄t see inflationary pressures negatively affecting wages in the euro zone and that inflationary expectations are under control, while the strong euro should help curb inflationary pressures in the euro zone, he said. Monetary policy remains accommodative and interest rates are expected to normalize.
It made sense for smaller European countries like Greece to join the euro zone because it gives them broader access to financial markets, the common currency and other benefits. But countries have to adopt the fiscal discipline demanded by the euro zone to be a part of the union, Borges warned.
***
Sempre sulle dichiarazioni di Borges.
FRANKFURT (Dow Jones)--Greece looks poised to avoid a restructuring of its debt though the International Monetary Fund remains ready to provide further aid to the country if requested by the government, an IMF official said Thursday.
"At this point, on the basis of our program, we think that Greece should be [headed] in the right direction to a position where its debt is sustainable. Under those circumstances, there΄s no need for any type of restructuring," said Antonio Borges, director of the IMF΄s European Department.
Borges said the IMF doesn΄t expect any kind of sovereign default in Europe at present, though he said he doesn΄t believe in "a miraculous restructuring solution," for Greece as suggested by some European politicians and market participants.
The IMF in June will be able to update its view on the pace of Greek reforms, following an ongoing investigation by the fund, Borges said.
As part of the country΄s reform efforts, the country has undertaken a EUR50 billion privatization program, which Borges said potentially represents only around 20% of total government-owned assets that could be sold off to raise cash.
"Greece is a special case because it is a real outlier, it is a government that has an extraordinary portfolio of assets," he said.
Greece could sell around EUR280 billion alone in real-estate assets, he added, but cautioned that privatization would take time and would be complicated by issues like local politics and labor unions΄ interests.
"We are not saying this is easy to do, we are saying this can be done over time," Borges said.
Separately, Borges said Spain had made excellent progress in restructuring its banking system over the past year, which he said was reflected in the market reaction to the country΄s banking system. Spanish banks΄ overall exposure to Portugal is limited and contagion risk from its Iberian neighbor isn΄t a major concern at present, Borges said.
More broadly, European banks still need to boost capital levels, although systemic risk for the European banking system has fallen over the past year. Plenty of capital is available for banks to boost their balance sheets, Borges said, as evidenced by a slew of recent capital increases by Italian lenders.
Borges said the IMF doesn΄t see inflationary pressures negatively affecting wages in the euro zone and that inflationary expectations are under control, while the strong euro should help curb inflationary pressures in the euro zone, he said. Monetary policy remains accommodative and interest rates are expected to normalize.
It made sense for smaller European countries like Greece to join the euro zone because it gives them broader access to financial markets, the common currency and other benefits. But countries have to adopt the fiscal discipline demanded by the euro zone to be a part of the union, Borges warned.
***
Sempre sulle dichiarazioni di Borges.
