, turned into overpessimistic forecasts under the 3rd mou, etc. and the most recent ones, like e. g. that the greek banks will need at least €10 billion capital injection as a result of the 2018 stress tests, will be “ all forgiven and forgotten ”, as they say. of course, a key prerequisite for a permanent return to the capital markets is the sustainable recovery of the greek economy with growth levels of above 2 %. on top of that and from my point of view, the following four proposals are also required : proposal # 1 : further increasing the cash buffer the government ’ s strategy - agreed with our lenders - makes sense : to fully cover the country ’ s financing needs for the first post - mou period. this is after all what all the other three countries did. for instance, in the case of ireland, it was a cash buffer of €25 billion, in portugal it was around €20 billion, in both cases around 13 % of their gdp. greece ’ s gross financing needs for the next two years amount to €45 billion, of which €18 billion will be covered by the primary surplus and the privatisation agenda, and there is an existing cash buffer already from the 2018 debt issues and from repos. my personal view is that due to : a ) adverse capital market conditions globally, the return of volatility and higher oil prices, inverted us yield curves as a result of monetary policy tightening, the widening libor - ois spreads, which exert pressure on the us dollar money market, the recent us dollar strength vis - a - vis other main currencies. all the above might have a greater impact on vulnerable countries with low credit ratings and weaker economies. name it, italy as described above or trump ’ s trade war with china and other major economies, the fog of uncertainty has thickened. b ) also due to political developments in greece as next year will be the year of european elections and also national and regional elections. plus there are also geopolitical risks in our neighbourhood ( our unpredictable eastern neighbour in connection with the drilling of gas in the aegean and cyprus ). all the above make a strong case for increasing the buffer as much as possible for shielding the economy. large cash buffers boosted investor confidence and have aided market re - entry in ireland, portugal and cyprus. the extra money could come from either the bank recapitalisation amount remaining from the 3rd programme,

soon, ultimately reaching a flat tax rate of 15 % and remain locked at the same level for another five years. the drastic reduction in corporate tax rates and the commitment to leave them unchanged for a period of five years will be the best signal to greek and foreign investors that the greek authorities are now seeking to change the country ’ s growth paradigm and move towards a dynamic economy based on private investment and exports. this drop in taxes could be financed by the fiscal space achieved through a decrease in primary surpluses, say, to 2. 5 % from 2020 onwards, bringing effectively forward a year or two the agreed - with - our - lenders lower primary surpluses, or from a persistent overshooting of agreed surplus targets of 3. 5 % of gdp until 2022. much to my delight, the above proposal that links lower corporate taxes to lower primary surpluses has been adopted by the bank of greece in may 2016 and by the main opposition leader at deth in thessaloniki in september 2016. c. the role of the ecb in countries under adjustment programmes as the euro area crisis was triggered by either a weak fiscal position in some cases or a weak banking system in others, it led to the “ negative feedback loop ” between banks and sovereigns, which the ecb emerged as the institution best equipped to tackle. it has used all the appropriate instruments at its disposal in order to ensure its primary priorities : price and financial stability across the euro area. c. 1 the role of the ecb on price stability 1. reducing base rates first of all, and since the emerging of the financial crisis in 2008, the ecb has reduced its main refinancing rate from 4. 25 % to 0 %, the largest cut ever decided over such a short period in europe, and also brought the interest rate paid on banks ’ deposits of excess reserves with the eurosystem to negative territory, - 0. 40 % today. 2. smp programme furthermore, as sovereign bond markets in some euro area jurisdictions were becoming increasingly dysfunctional, in may 2010 the ecb approved the securities market programme ( smp ) worth €210 billion. its main effect was to cut refinancing costs for countries whose bonds were sold at unsustainable interest rates on international markets, leaving at the same time the money supply unchanged through sterilisation. 3. ltros and tltros in december 2011, the ecb revived the longer - term refinancing instrument making the central