ATHENS – The forbidden subject of Greek debt relief – but with new measures attached – was raised by Eurozone officials at a meeting but even if granted means Prime Minister Alexis Tsipras won’t get the “clean exit,” from three international bailouts of 326 billion euros ($397.61 billion) he’s been touting.
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).
Germany, the biggest contributor to the rescue packages, including a third for 86 billion euros ($104.89 billion) that Tsipras sought and accepted after saying he would do neither because it came with more brutal austerity measures he didn’t want – after already reneging on promises to help workers, pensioners and the poor – had ruled out any Greek debt break.
But Eurogroup Working chief Thomas Wieser, an American-Austrian economist working for the European Union, told Kathimerini in an interview that while there hasn’t been any determination about post-bailout arrangements for Greece that he expects it will include debt relief but with more measures, ruling out Tsipras’ hopes for a clean break and no additional monitoring from the lenders.
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.
Wieser said that, “If there should be further debt relief after the end of the program then it’s only logical there will be some kind of additional agreements.”
Greece’s post-bailout status was raised last week at the meeting in Brussels of the Eurogroup (EWG),an informal body where the ministers of the euro area member states discuss matters relating to their shared responsibilities related to the euro, used by 19 of the 28 countries in the European Union.
That led to questions about post-bailout terms that could see the lenders keeping some supervision and a watch over the Greek economy although Tsipras, along with an avalanche of tax hikes, pension cuts and taxes on low-and-moderate income families, also had already agreed to automatic spending cuts if fiscal targets aren’t met.
According to EU regulations, bailout countries including Ireland, Spain, Portugal, Cyprus – as well as Greece in the near future – will be monitored until 75 percent of their loans have been repaid. This means in Greece’s case that it will be monitored until 2060.
Wieser said one of Greece’s biggest problems is the inability to lure foreign investors, which Tsipras has made a priority – after reneging on vows to keep out foreign companies – and as elements in his ruling Radical Left SYRIZA are trying to block investments.
“I still have the feeling that foreign direct investment is not welcomed in Greece as it is in many other countries,” Wieser said, without noting foreign companies are anxious over Greece’s volatile and changing tax laws, tax hikes, notorious bureaucracy and rampant corruption where bribes are sought for licenses and permits, a practice Tsipras said he’d stamp out but hasn’t.
“I think it’s only very recently that international and national investors trust that Greece is finally approaching the time where it can stand on its own feet again financially and that it is not a huge risk to invest in its economy,” he said, saying it’s a key obstacle to getting people with money to come to Greece.