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ECB must include Greece in bond-buying plan, says Greek finance minister
January 22, 2015 / 7:54 AM / 3 years ago

ECB must include Greece in bond-buying plan, says Greek finance minister

BERLIN (Reuters) - Greece’s finance minister urged the European Central Bank not to exclude it from a quantitative easing program, expected to be announced later on Thursday, telling German business daily Handelsblatt that nobody needed it as much as his country.

“I hope that Greece will not be excluded as no country needs quantitative easing as much as Greece,” Gikas Hardouvelis told the paper.

“We are the country with most deflation, the highest debt ratio and the highest domestic interest rates,” he added. “In theory .. we are the ideal recipient of the program.”

He also said monetary policy should allow national central banks in countries with problems “more free credit” and that the ECB’s money-printing program should not be linked to political developments, such as Greece’s election on Sunday.

The ECB is poised to announce a closely-watched plan to buy government bonds later on Thursday to reinvigorate the flagging euro zone economy and ward off deflation.

Hardouvelis also called for the “troika” of the European Commission, International Monetary Fund and ECB to raise its short-term borrowing cap via T-bills to 20 billion euros from 15 billion euros.

Greece has reached its limit on outstanding T-bills and remains shut out of bond markets. The remaining aid installments under its 240 billion euro bailout have not been disbursed as they are contingent on Athens completing a bailout review with the troika.

“The troika must agree to raise the cap,” he told Handelsblatt. When asked about a cap of about 20 billion euros, he replied: “Something like that in the short term.”

Hardouvelis also said Greece’s European partners should be a bit flexible on Greece’s 2015 budget goals and that there was only a very slim chance that Greece would leave the euro zone after the election as its people didn’t want to.

Reporting by Madeline Chambers; Editing by Paul Carrel and Stephen Brown

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