Greece Hopes to Clear Next Bailout Review This Year, Pappas Says

  • No need to delay release of next fund installment: minister
  • Greek banks don’t need asset-quality review, Pappas says

Greece's Pappas Expects 2 Percent Growth This Year

Greece wants the next review of its European loan program to wrap up by the end of the year, which would pave the way for additional money to be disbursed in 2018, according to a senior member of Prime Minister Alexis Tsipras’s government.

Euro-area nations in July approved the release of 8.5 billion euros ($10.2 billion) to Greece under an 86-billion euro bailout. The review process for that installment dragged on for months as Greece, its European creditors and the International Monetary Fund squabbled over the country’s debt-reduction plan.

Greek officials hope to avoid similar delays in the upcoming review under the euro-zone program, said Digital Policy Minister Nikos Pappas, an economist who is considered a close adviser to Tsipras. Greece cannot receive the next tranche of funds until the review is complete.

“We hope to conclude before the end of the year. There is absolutely no reason to have any delays,” Pappas said Friday in an interview in Washington. “If there are delays, it is not going to be because of Greece.”

Pappas said the Greek economy is rebounding, with output set to expand 2 percent this year and unemployment falling. Greece raised 3 billion euros in July, in its first dip into the global bond market since 2014.

The IMF projects the Greek economy will grow 2.1 percent this year, though it has warned that the nation’s debt is unsustainable. The Washington-based fund has said it won’t release the funds of a new loan program unless Greece’s European lenders offer debt relief.

Stress Tests

This week, the IMF said it’s critical that Greek banks undergo stress tests and a review of their asset quality before the euro-zone bailout ends next year. But a European Central Bank executive board member, Benoit Coeure, said Friday that such a review isn’t necessary, a view that Pappas echoed.

“They have turned the corner,” Pappas said, referring to Greek banks. “Deposits are coming back.”

Pappas said preparations are under way for Tsipras to meet with President Donald Trump in Washington, as Greece strives to attract more U.S. investment in infrastructure and its energy industry. The minister cautioned that a date hasn’t been set for the trip.

“We need to have substance and good things to announce, so we’ll keep working on it,” he said.

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