benoit cœure : greece - progress achieved and challenges ahead keynote speech by mr benoit cœure, member of the executive board of the european central bank, at the american - hellenic chamber of commerce conference on " greece and the global disruptive environment : a look into the future ", athens, 28 november 2016. * * * ladies and gentlemen, thank you for inviting me to this conference. i am grateful for this opportunity to share with you the ecb ’ s perspective on the third economic adjustment programme for greece. this conference aims to be “ a look into the future ”, and i will indeed try to provide that by considering the challenges and prospects ahead. before doing so, let me briefly recall the circumstances in which the third european stability mechanism programme for greece was negotiated, as this remains key to understanding where we are now. against this backdrop, i will review the progress made in the third programme and discuss the way forward. i will mainly focus on financial issues, as i believe this is where the ecb ’ s perspective is of particular relevance. challenges for greece at the start of the third programme what were the challenges facing greece in summer 2015 when the programme was negotiated? after a severe and long recession, which started back in 2009, the long - awaited rebound of the greek economy finally got under way in the second half of 2014. but renewed uncertainty and the lack of any prospect of continued financial assistance led to a worsening of the economic environment and of sovereign creditworthiness in early 2015. this in turn had a severe impact on an already severely weakened financial sector. between december 2014 and june 2015, deposit outflows amounted to more than a quarter of total deposits. lack of adherence to the second programme barred the ecb, under its rules, from waiving its minimum credit requirements and accepting greek government - linked securities as collateral in its monetary policy operations. nevertheless, the eurosystem provided the liquidity necessary for the greek economy to function, with adequate safeguards against monetary financing of the government. as a result, central bank funding rose from €56 billion to over €125 billion, more than two - thirds of greece ’ s gross domestic product. amid mounting uncertainty, bank holidays and capital controls were introduced in late june 2015, which eased immediate liquidity pressures in the banking sector. in august 2015 an agreement was reached on a third programme. one of the immediate priorities at that time was to regain depositor and market confidence in the greek banking system. to

( pspp ), a topic much debated by politicians and the media in greece in recent weeks, let me be clear that the governing council of the ecb takes decisions on the pspp in full independence. programme developments and, in particular, the debt sustainability assessment of the institutions are an important input, but they are not the only ones. 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. 3 / 4 bis central bankers'speeches to bring the programme to a successful conclusion and to restore market access for the sovereign on a lasting basis, it is above all essential that the greek authorities continue to show a serious commitment to the goals and measures taken under the programme. only if this happens can all stakeholders be confident that reforms will not be reversed and in fact be strengthened after the programme, therefore further supporting the potential for growth of the greek economy. conclusions let me conclude. i have outlined the progress achieved so far and mapped out the challenges ahead for the third greek adjustment programme. in the summer of 2015, european leaders agreed on a series of measures that will secure greece ’ s future in the euro. if everyone plays their part, i am firmly convinced that, by the end, greece will be better able to reap the benefits of economic and monetary union – a union of 340 million people sharing the same currency – and its economy will be stronger and more resilient. thank you for your attention. 4 / 4 bis central bankers'speeches