Greece is set to exit its bailout program and move towards growth in 2018 and 2019, according to a recent report released by Swiss financial services provider UBS.
In its latest report, the Zurich-based firm estimates that Greece’s growth rate will be much higher than its international lenders predicted.
UBS foresees a ‘healthy’ departure from its bailout program due to the scale economic recovery thus far; the fact that both Greece and its lenders have significant incentives to ensure this happens particularly in view of the fact that Greece may be able to complete the program with significantly higher capital reserves than predicted, which could go towards its financing needs after 2019; and finally, the status of the banking system is according to UBS “manageable”.
Greece is now in the final phase of its bailout program, which is set to end in August. The country has received 260 billion euros in three rescue schemes since 2010. In the meantime, it will be negotiating its exit terms and financial aid in the months ahead.
European Economic and Financial Affairs Commissioner Pierre Moscovici said he was “especially optimistic” about efforts to reach a solution on debt.
In Athens on Thursday for talks on the next steps in the program, Moscovici said: “Being in the program means being in the program, being out of the program means being out of the program, there cannot be a fourth program or any kind of fourth program, either a precautionary program.”
He said that Greece and its lenders must agree on measures for medium-term debt relief in June, before Greece exits the rescue program later in the summer, and added that a period of post-bailout surveillance would also need to be defined.
In the meantime, the Greek economy is expected to grow by 2.5 percent in 2018 and in 2019 with public debt forecast at 180 percent of gross domestic product this year.
Eurozone finance ministers are set to meet on the issue on June 21.