European Commissioner for Economic and Financial Affairs Pierre Moscovici said on Monday night that he believes a staff-level agreement with foreign creditors is “doable” before a December 5 meeting of eurozone finance ministers.
Speaking at the 27th Greek Economy Conference organized by the American-Hellenic Chamber of Commerce in Athens, Moscovici said that an agreement by next week’s Eurogroup is crucial to paving the way for a discussion on Greek debt.
“My guess, my take, is that we are not so far away from this. That it is doable. That we can make it and that you can have a deal with all parties around the table,” Moscovici said during his keynote speech at the event.
“To me this must be opening of a sequence that needs to lead to what I call a global deal about the Greek program,” Moscovici said. “In my view that means completing a virtuous circle, where reforms are led, which leads to confidence, which also leads to a coming back of investors, foreign direct investors and Greek investors but also European investors in this country.”
“This is why it is so important that we are capable of reaching a staff-level agreement before the 5th of December, so that there is a sequence that is open that can lead us also to examine positively the question of debt, debt reprofiling before the end of this year.”
The European official appeared upbeat about the course of the Greek economy, noting that there have also been “encouraging signs” from the labor market.
“A shift is now clearly observable and I am glad to be able to make this observation that wouldn’t have been possible a few years ago,” Moscovici said.
However, he added, Greece needs to take “ownership” of the reforms it must implement to honor its agreement with foreign creditors and get the economy back on track.
“There can be no backtracking, no going back to the unsustainable policies and practices of the pre-crisis period. Nobody must have any nostalgia for that period,” Moscovici said, emphasizing the need to improve the business environment and boost investment, while at the same time ensuring a fair and efficient social welfare system.
“We have to pre-empt people’s legitimate concerns and to ensure that economic growth is inclusive. To that end, a strong social welfare system, combined with education, culture, with training opportunities is essential. To ensure that all can participate in building Greece’s future, we have to render the system both effective and sustainable,” Moscovici said. “Greece’s future is at stake; the first without the second means only those in a position to benefit today will benefit while future generations will be left to fend for themselves. This is not acceptable and that does not reflect the European social model.”
The French commissioner also noted progress in tax reforms, which, he said, “are intended to facilitate and improve tax compliance and collection, to extend the tax base so that not only a few pay while many benefit, simplify complexities and mitigate administrative burdens and overlap.”
However, he also stressed the need for Greece to look at the big picture beyond the bailout review and debt relief measures.
“I would encourage the authorities to start thinking about what comes afterwards and how to prepare the ground from now,” Moscovici said. “Taking a perspective beyond the program period is key to foster confidence in continued policy delivery and to deliver and develop a credible and well-supportive growth narrative for Greece. To be very frank, we still expect that. We need that. And that’s what needs to be reinforced now: stability, predictability over a long-term horizon, long enough to generate the benefits that have started to emerge and which we see as possible.”