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Greek central bank chief warns over backtracking

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ATHENS: Greece’s central bank governor warned the country not to backtrack on commitments to its lenders after it exits the last of its three bailouts next week, saying markets would abandon it.


Yannis Stournaras told Sunday’s Kathimerini newspaper any backpedalling could leave Greece facing major risks at a time when it would be particularly vulnerable to financial turbulence in neighbouring Turkey, Italy and beyond.


Athens is set to exit its latest bailout on August 20 and rely on bond markets thereafter to refinance its debt after a nearly nine-year debt crisis that shrank its economy by a quarter and forced it to implement painful austerity.


“If we backtrack on what we have agreed, now or in the future, the markets will abandon us and we will not be able to refinance maturing loans on sustainable-debt terms,” Bank of Greece Governor Yannis Stournaras told the paper.


Since the debt crisis exploded in early 2010, four successive governments fought to keep bankruptcy at bay, relying on the biggest bailout in economic history, more than 260 billion euros lent by Greece’s euro zone partners and the IMF. Shut out of bond markets after a fiscal derailment, Greece officially asked for a bailout in April 2010 with the International Monetary Fund and its euro zone partners granting 110 billion euros in loans to avert a financial meltdown. Two more aid packages followed. — Reuters


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