##utionary assistance programme should not be neglected. the possibility of a recourse to a precautionary support programme, especially if financial market conditions call for one, must not be overdramatised, as the european mechanisms are there to be used if needed. such a precautionary assistance framework can be expected to support the greek economy, by helping to reduce borrowing costs, since it will provide assurance of the greek government ’ s and banks ’ access to funding beyond the end of the current programme in august 2018. under an esm precautionary credit line, funds would become available, without necessarily having to be raised beforehand, whereas the build - up of a cash buffer necessarily entails additional borrowing, which would increase the annual debt service costs. moreover, this precautionary financial assistance framework would ensure that the waiver on greek government bonds stays in place, so that the latter remain eligible as collateral in eurosystem monetary policy operations until greece regains an investment grade credit rating. furthermore, in such case, the buffer for systemic banks should remain available beyond august 2018. finally, the maintenance of the waiver, along with the debt sustainability measures, would enable the purchase of greek government bonds by the european central bank under its public sector purchase programme either in its regular duration or during the reinvestment period, thereby exerting a downward effect on the borrowing costs of greek government. ( d ) the post - programme surveillance framework according to the european institutional framework, the end of the greek programme in august 2018 does not relieve greece of its obligations vis - a - vis its lenders. what changes is the form of the surveillance framework for greece, which must conform to the general surveillance terms and regulations in force in the european union. 2 / 5 bis central bankers'speeches regulation ( eu ) no. 472 / 2013 of the european parliament and of the council provides for automatic post - programme surveillance until the country repays 75 % of the loans it has obtained from other member states, the european financial stability fund ( efsf ) and the european stability mechanism ( esm ). furthermore, the european commission reserves the right to subject a member state to enhanced surveillance, if it judges that this is warranted by the circumstances. apart from these provisions, already in force, the european commission has proposed changes to the economic governance of the euro area, some of which could be relevant for the type of post - programme surveillance that the greek economy would be subject to

yannis stournaras : greece - achievements, challenges, risks and a strategy for the future speech by mr yannis stournaras, governor of the bank of greece, at the delphi economic forum, athens, 3 march 2018. * * * the progress made since the beginning of the debt crisis in 2009 is remarkable and unprecedented by international standards. more specifically, greece achieved : the full elimination of the twin deficits, i. e. the very high fiscal deficit and the large current account deficit. the full recouping of competitiveness in terms of labour costs and its considerable improvement in terms of prices. it is worth noting that this was achieved through a painful process of internal devaluation, involving significant reductions in nominal wages and salaries, mainly in the private sector. at the same time, a bold reform, privatisation and economic modernisation programme is being implemented in areas such as the labour and product markets, the healthcare and social security systems, the fiscal framework, the tax system and public administration. ( however, there has been considerable backtracking, according to world bank indices, regarding the rule of law, the quality of governance and institutions. ) as a result of all these major reforms during the eight years of the crisis, the economy has become more extrovert and the production model has begun to rebalance towards exportoriented sectors. finally, the restructuring and consolidation of the banking system, characterised first and foremost by significant recapitalisation, following stringent stress tests and in - depth asset quality reviews, ensure high capital adequacy ratios ( common equity tier 1 - cet1 ), higher than the european average, which, along with a satisfactory npe coverage ratio, enable greek banks to effectively manage their high stock of npes. it should however be noted that, despite the progress made, the crisis has had significant costs in terms of output and employment losses and a marked decline in household wealth. between 2008 and 2016, greece lost over one fourth of its gdp at constant prices, and unemployment rose by nearly 16 percentage points. furthermore, per capita gdp in purchasing power parity in 2016 came to merely 68 % of the eu average, down from 93 % in 2008. meanwhile, a large brain drain has taken place, depriving greece ’ s society and economy of one of its productive parts, with devastating demographic, economic and social consequences. challenges ahead ( a ) public debt sustainability the high level of public debt feeds uncertainty