BoG head: Part of the 11.5 bln euros of HSFS as last resort credit line

November 5, 2014
Written by E.Tsiliopoulos

"The fact that the European Central Bank's (ECB) stress tests showed that Greek systemic banks do not lack capital gives the Greek economy the opportunity to make use of the 11.5 billion euros of the Hellenic Financial Stability Fund (HFSF) with greater ease and flexibility," said on Wednesday Bank of Greece (BoG) governor Yannis Stournaras to newspaper "Ta Nea".

According to Stournaras, "the largest part of this amount could be used as a precautionary credit line returnable to the European Stability Mechanism (ESM).

In this way:

a) it remains available in case it is needed either for the banking system or for the wider needs of the Greek economy

b) it equally reduces the national debt as long as it is not used and

c) since it reduces the debt it enables the Greek government to negotiate a realistic relaxing of the target for the primary surplus in 2016, with aim the overall benefit of the Greek economy and Greek society."

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