Taking into consideration the most recent comments by a number of key EU officials on Greece’s possible inclusion in the ECB’s quantitative easing (QE) program this note updates our recent analysis on the issue, focusing on the key preconditions for and the potential timeline of such a development. Furthermore, it revisits the issue of sustainability of Greece’s fiscal position, analyzing the potential medium- and long-term drivers of Greek public debt and explaining why new substantial debt relief from the official sector is a crucial prerequisite for stabilizing investor sentiment and allowing the domestic economy the necessary breathing space to grow its way out of the present recessionary environment.
QE for Greece: a necessary precondition for stabilizing investor sentiment and preventing the need for further official sector financing post-2018
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