‘Greece to exit recession by 2014’

BERLIN (AFP) ― Greece, bailed out by the EU and the IMF and mired in recession for a fifth year, should return to growth from 2014, European Central Bank board member Joerg Asmussen said.

“I expect, following the implementation of the (government’s) program to stabilize the public finances, positive growth in Greece from 2014,” Asmussen told the Rheinische Post in an interview to appear Tuesday.

The Bank of Greece estimates the economy will shrink 4.5 percent this year, the fifth the eurozone member state has spent in recession after the collapse of its public finances forced Athens to seek a 2010 bailout from the EU and International Monetary Fund.

The aim of the program, involving a series of stinging austerity measures, is to keep Greece in the 17-nation eurozone, Asmussen said, adding: “The cost of Greece leaving the eurozone would be incalculable.”

Asmussen, a former German deputy finance minister who took his ECB seat in January, also insisted that the exceptional measures the central bank has taken since the onset of the eurozone debt crisis were temporary.

The ECB pumped around one trillion euros ($1.30 trillion) into the banking system in December and February, offering the commercial banks very cheap funds in the hope that they would lend the money and so boost business.

There has been some concern, especially in Germany, that such a mountain of cheap cash could instead stoke inflation and speculative activity on the markets rather than genuine economic growth.

The ECB recognizes the problem but last week head Mario Draghi said it was too early to reverse course just yet given the uncertainties over the economic recovery, which has slowed markedly in the past few months.

“It is important that the ECB’s exceptional measures be limited in time and nobody should think that just because we offered this sort of funding twice we will offer it a third time,” Asmussen cautioned.