Finance Minister Tsakalotos Says Greece Has Post-Bailouts Plan

February 1, 2018

ATHENS – Disputing analysts and the country’s international lenders, Finance Minister Euclid Tsakalotos said Greece will make a clean break when three bailouts of 326 billion euros ($405.58 billion) expire in August, even though the money can’t be repaid.

The Marxist economist was forced into embarrassing surrenders to the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) that put up 86 billion euros ($106.99 billion) in a third rescue package in 2015 that Prime Minister and Radical Left SYRIZA leader Alexis Tsipras said he would never seek nor accept but did both even though it came with more grueling austerity measures he swore to reject.

Tsipras said there will be a so-called “Clean Exit,” from the bailouts but the lenders, analysts and major banks said Greece’s economy will need monitoring up to the year 2060 and the Premier agreed to automatic spending cuts if fiscal targets aren’t met.

Tsakalotos, disagreeing with Bank of Greece Governor Yannis Stournaras – who is feuding with the government’s projections – said there’s no need for a precautionary credit line if the country can’t make a successful return to the markets.

Greece made a test bond sale in July, 2017 of three billion euros ($3.73 billion) but it came with interest rates more than three times higher being paid for the bailouts, setting off some caution among analysts.

But Tsakalotos told the Reuters news agency that Greece is building up its own protective buffer that, along with unused European bailout funds, would cover Greece “for well over a year,” if needed. He didn’t say where the buffer was coming from nor how much it is.

He also said Greece will be preparing its own post-bailout plan with an emphasis on reforms, social policies and growth despite concerns those can’t be met as the government has also failed to bring in significant Foreign Direct Investment (FDI) with some elements in SYRIZA trying to block all foreign companies.

He also said there would be discussions with Eurozone officials about debt relief, a longer time to repay and lower interest rates although Tsipras so far hasn’t resurrected talk of an outright cut in debt which would force the taxpayers in the other 18 countries using the euro to pick up the tab for generations of wild overspending and runaway patronage. “We feel we have built credibility over the last three years,” Tsakalotos said.

Despite the bailouts Greece still has a debt ratio of 178 percent of its Gross Domestic Product (GDP) a level even Tsipras said is unsustainable at the same time he’s claiming he’s brought the country to recovery without, if that happens, mentioning it would be because he reneged on promises to reverse austerity.

A precautionary credit line would come with more conditions that Tsipras is eager to avoid with elections scheduled for 2019 and his popularity plummeted through the floor after breaking promises to reverse big pay cuts, tax hikes, slashed pensions and privatizations.

Part of the post-bailout plan would be to create a safety net of 19 billion euros ($23.64 billion) from leftover, unused bailout funds and from bond issues, the report said.

Post-program surveillance schemes were common to other European member states which sought financial aid, Tsakalotos said. But Greece’s own post-bailout plan would be more pro-active and show lenders and markets that Greece is back in control of its economy.

“We are thinking, by Easter, of preparing our own plan .. to show both the institutions but also the markets that it is our program, it has ownership … it hasn’t been imposed, it’s not a matter of compromise,” he said without detailing what it would be.

“We’ve been outperforming our fiscal targets, the economy is returning,” he said. “To those people who think we need something more, like a precautionary credit line or whatever, they are just pushing the key question back and I don’t see any reason for that,” Tsakalotos said.

The Washington, D.C.-based International Monetary Fund, which took part in two first bailouts of 260 billion euros (($323.47 billion) hasn’t said if it will join the third and has called on the Troika to grant debt relief while insisting it be paid back in full.

“I think their inclination and their strategy is to get a deal that makes the Greek debt sustainable so they can come on board,” he said even though the government said the debt can’t be repaid in full.

Greece and its lenders are expected to follow a French proposed mechanism presented last year to to link debt relief to Greece’s growth rates. The economy is expected to grow by up to 2.5 percent this year and in 2019 although the government has built a primary surplus – not including interest on the debt, the cost of running cities, towns, state enteprises, social security and some military expenditures – but delaying or not paying vendors and its bills.

“What we will be going over the next month or so is working out the nitty-gritty of it, the mechanism, how it will kick in, when it will kick in,” Tsakalotos told Reuters, adding that a kind of subcommittee of the Euro working group would handle this.

“The only outstanding issue is the composition of that buffer, how much will come from Greece’s own funds, and how much will come from the ESM and I‘m looking forward to that debate.”

Greek banks are buried under nearly 100 billion euros ($124.41 billion) in bad loans with people unable to pay because of austerity measures although Tsipras, reneging again, is allowing banks to seize homes and chase debtors, except for some businesses who won’t repay and political parties who have defaulted as well.

Greece will need foreign supervision for at least another decade, the European Commission’s envoy to the country, Declan Costello told Dutch lawmakers at the Hague, the Greek newspaper Ta Nea said.

Costello said he doubted whether Greece can achieve sustainable growth in the long term, according to the report which said the official pointed to “serious problems.”
He also cited continuing unemployment woes, the highest in the EU, delays in privatization and other unfinished reforms and austerity measures as problematic.


ATHENS - A 50-year-old man charged with murdering his estranged wife, 40, by repeatedly stabbing her in the abdomen was on Monday remanded in custody after testifying before an examining magistrate.

Top Stories


A pregnant woman was driving in the HOV lane near Dallas.

General News

NEW YORK – Meropi Kyriacou, the new Principal of The Cathedral School in Manhattan, was honored as The National Herald’s Educator of the Year.


Sour Patch Kids Oreos? Peeps Pepsi? What’s Behind the Weird Flavors Popping Up on Store Shelves

Van Leeuwen Ice Cream usually draws customers with gourmet takes on classics like vanilla and pistachio.

SYDNEY  — The Australian and New Zealand governments announced Tuesday they were sending planes to evacuate their nationals from violence-scorched New Caledonia.

WASHINGTON  — President Joe Biden and the Democratic National Committee said Monday that they raised more than $51 million in April, falling well short of the $76 million that Donald Trump and the Republican Party reported taking in for the month.

PHILADELPHIA - Pro-Palestinian protesters ignored a request by Drexel University's president to disband their encampment on Monday as arrests linked to campus demonstrations against the Israel-Hamas war surpassed the 3,000 mark nationwide.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. [email protected]

You may unsubscribe at any time using the link in our newsletter.