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EU Finance Chief Says No Clean Bailouts Exit for Greece

February 8, 2018

Ahead of a visit to Athens, European Commissioner for Economic and Financial Affairs has Pierre Moscovici said Greece’s troubled economy will need to be supervised by its international creditors after three bailouts of 326 billion euros ($398.6 billion) run out in August, contradicting Prime Minister Alexis Tsipras’ claims of a “clean exit” coming.

“Because many of the program commitments will continue to be implemented long after the program ends, there will also need to be an appropriate type of post-program surveillance in place,” Moscovici said in an interview with the Athens-Macedonian news agency.

“But let’s be clear: there will be no more memoranda,” he added, referring to the three deals successive Greek governments signed in agreeing to impose harsh austerity in return for the monies, including 86 billion euros ($105.15 billion) in a third rescue package that the Radical Left SYRIZA leader Tsipras sought and accepted in 2015 after saying he would do neither.

That led him to renege on anti-austerity promises and bury Greeks with avalanche of new taxes and hikes, taxes on low-and-middle income families, more pensions cuts and stripping the most vulnerable of benefits, including families with three or more children.

With the bailouts expiring in August, Tsipras said he’s bringing Greece to recovery – without mentioning he’s reneged on anti-austerity promises to do it – but that the country can’t repay its debts and needs a break from its creditors, the Quartet of the European Union-International Monetary Fund-European Central Bank-European Stability Mechanism (EU-IMF-ECB-ESM).

Tsipras has been hanging his hat on hopes Greece can return to the markets after in July, 2017 floating a test bond of 3-billion euros ($3.66) that sold quickly but at interest rates more than three times higher than the bailouts.

The government wants to build an 18-billion euro ($22.07 billion) buffer against any chance of more taxes or austerity. Deputy Prime Minister Yannis Dragasakis earlier said the coalition that includes the pro-austerity, marginal, jingoistic Independent Greeks (ANEL) wants a “self-sufficient exit into the markets after the end of the program,” he told the country’s state broadcaster.

Dragasakis said the government wants a cushion, not the pre-cautionary program that Bank of Greece Governor Yannis Stournaras suggested.

Dragasakis said that would turn into “new taxes as well as uncertainty over the future,” while downplaying the need for a buffer he said would come from the European Stability Mechanism, one of the country’s lenders, and from returning to the markets.

Other EU officials, banks and analysts said Greece will need continued monitoring after the bailouts and Tsipras has agreed to automatic spending cuts if fiscal targets aren’t met.

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