Former Piraeus Bank CEO Michalis Sallas, one of the most prominent banking executives in Greece over the past quarter of the century, reiterated this week that he’s in favor of an exit from the memorandum era without a precautionary credit line, a position mostly aligned with the coalition government, rather than European creditors and the Bank of Greece (BoG) governor.
The looming end of the third – and last – bailout program ends in August 2018, with both Athens and its institutional creditors now anxiously looking towards the post-memorandum period, when Greece will have to turn to the markets for its borrowing.
In a lengthy article in the latest edition of Foreign Affairs, Sallas says the amassing of a “cushion” of between 18 to 20 billion euros, by the Greek side, is enough to proceed into the post-memorandum period.
Conversely, he said use of a precautionary credit line would mean a new memorandum, with another round of austerity measures and the imposition of new restrictions, which he said Greek society will not readily accept, and which the country’s politicians will be hard pressed to manage.
On a brighter note, Sallas said he believes the conditions in crisis-battered Greece have now matured to the point that the country can exit what he called an economic “vicious cycle”.
