ECB’s Asmussen: Greece must press on with reforms despite pain

Greece can achieve a primary budget surplus this year and growth in 2014 if it sticks to economic reforms, but a return to bond markets will be challenging, European Central Bank Executive Board member Joerg Asmussen told Sunday's To Vima newspaper.
Asmussen was in Athens last week to meet senior government officials and take stock of the economy. His visit was overshadowed by speculation of a new bailout for Greece after comments by German Finance Minister Wolfgang Schaueble.
"Having a low but positive rate of growth next year is achievable, but there must be persistence with reforms," Asmussen told the paper in an interview.
"I understand the difficult political situation and the small parliamentary majority, but what has been achieved with such political pain up to now must not be demolished. What's the credible alternative solution?" he was quoted as saying.
Mired in its sixth straight year of recession, Greece has already been bailed out twice since 2010 with 240 bln euros of loans coordinated by the ECB, European Union and IMF.
Athens faces a funding gap of about 11 bln euros in 2014-15 after its current bailout programme ends in the first half of next year and its euro zone partners have pledged additional support until it can tap markets again.
"It is true that the debt level will rise in the next years and a full access to markets will be a challenge," Asmussen was quoted as saying.
The ECB clarified that in the English version of the interview, Asmussen said that Greece's debt level "would be elevated for years to come", not that it would rise.
But he said speculation of a third rescue package was premature.
"Repeated talk of a debt reduction, a haircut, does not help. It distracts the attention of all stakeholders from what needs to be done under the current adjustment programme. We must make this programme work," he told the paper.
He said the part of the bailout that dealt with the recapitalisation of Greece's top four banks was a success, helping to restore financial stability, with funds left over at the bank bailout fund as a cushion for any future needs.
Asmussen told the paper complacency and reform fatigue were the biggest risk to an improving European economy.
"The biggest risk to the positive trend I see shaping up is not doing enough, believing that markets are calm or that we are in safe waters," he said.