benoit cœure : interview in efimerida ton syntakton interview with mr benoit cœure, member of the executive board of the european central bank, in efimerida ton syntakton, conducted by mr vasilis georgas, and published on 26 november 2016. * * * is it realistic to expect that the second review of greece ’ s economic adjustment programme will be completed by the end of the year, so that, in combination with the short - term measures on debt, the ecb can include greek bonds in the quantitative easing ( qe ) programme? the conclusion of the review is something that is eventually decided by the eurogroup and by the board of directors of the european stability mechanism, in line with the assessment of the european commission and in liaison with us. the review is still ongoing and discussions are making good progress but are still under way on all different policy areas. the eurogroup meeting on 5 december will be a useful opportunity to take stock of the progress made and set the timeline for the conclusion of the review. it is in the interest of the greek economy that the review is completed in a timely way. as for including greek government bonds in the public sector purchase programme ( pspp ), we don ’ t have a precise timeline. this is a decision taken independently by the governing council of the ecb. programme developments and clarity on debt measures are an important input given our concerns about debt sustainability, but they are not the only determinant of the final decisions. the governing council will base its assessments also on internal analysis and will take into account other risk management considerations before making its final decision. is inclusion in the qe enough for one to argue that greece is turning the page? many believe that it will be the short - term speculative funds that will benefit from this, while the country will continue to be burdened with high public debt and extremely high unemployment. the inclusion of greek bonds in the pspp could be an important signal that reforms are on track and debt is being put on a more sustainable footing. but again, we do not have a precise timeline yet and any decision will be based on internal analysis taking into account risk management considerations. is the greek programme workable? do you believe that, in 2018, greece will have returned to the markets successfully and will be able to be entirely funded by them? the explicit aim of the financial assistance programme is to restore greece ’ s full access to international capital markets by

surplus is a necessity for greece given its high debt level, with or without debt measures. of course, consolidation itself should be carried out in a growthfriendly way and tilted towards a reduction in expenditure rather than an increase in taxation. fiscal policies are embedded in a wider reform strategy comprising labour and product market reforms, measures to fight tax evasion and the reduction of non - performing loans ( npls ) to allow banks to lend again to greek households and companies. these measures will help reduce unemployment, increase investment and support growth. this will accelerate the lifting of capital controls and reduce fiscal constraints over time. greece is starting to reap the benefits of these reforms. economic sentiment is improving and we expect real gdp growth to increase in 2017. why is it that, after three mous and five governments since 2011, greece has not yet managed to turn the page? what has been done wrong under the mous all these years? greece has been through a painful adjustment, which could not have been avoided given the high imbalances it built up until 2010. and the adjustment took longer because of the lack of implementation and prevailing uncertainty ( including in the rest of the euro area ). with hindsight, the programme could have been designed to be more conducive to growth. for example, the opening - up of the product market has lagged wage cuts, protecting rents and making the burden of adjustment fall heavily on workers. greece still lacks a comprehensive social safety net and had to protect the most vulnerable using taxes and pensions, making the tax structure very distortive. and europe had only limited instruments to support social safety nets during the adjustment phase. but let ’ s also not forget that europe had to build its own crisis resolution architecture out of nothing when the crisis hit. how do you explain the fact that, after the last recapitalisation of greek banks and the relaxation of capital controls, we have witnessed neither a significant return of deposits 2 / 4 bis central bankers'speeches nor more liquidity in the economy nor a reduction in non - performing loans? even though confidence levels as evidenced by a return of deposits and hoarded cash have strengthened following the successful completion of the first review of the programme, confidence still remains fragile. we expect that market and depositor confidence will further improve following the successful completion of the second review and the steady, successful implementation of the programme. several of the measures to be implemented in the context of the second review will contribute to the return of confidence