Greece will remain under strict supervision for years, EWG chief says

Greece will remain under strict supervision for years, EWG chief says

The Greek economy will remain under close supervision for years after the completion of the third bailout deal, the president of the Euro Working Group (EWG), Thomas Wieser told in an interview published on Wednesday.

Even though he is confident the cash-strapped country will be able to recover, Wieser says that a lot of work needs to be done first, starting with the timely completion of the third bailout review. He also suggests that additional measures may be needed in 2019 and 2020 depending on the course of the budget next year.

Asked whether he believes this will be Greece’s last memorandum, the Austrian-American economist says “three programs have already been implemented in the space of eight years and the political desire for yet another is zero. The rest of the eurozone also wants the third program to be the last one.”

Wieser adds that Greece’s ability to tap international lending markets by the end of the program in August 2018 will be a “decisive factor for the Greek government to push ahead with reforms.”

“In other words, knowing that the program is ending in a few months is a huge incentive to get the reforms done,” he says, adding that a successful completion of the program is within reach given the government’s limited fiscal obligations.

Wieser appears confident that Greece will successfully wrap up the upcoming review within the fall even though the government needs to push through 95 so-called prior actions, saying the majority has already been legislated. However, he adds, Greece may need additional measures after August 2018 depending on whose scenario plays out: the International Monetary Fund’s pessimistic outlook, or the upbeat projects of the European institutions and the Greek government.

Greece will also remain under supervision – as have Spain, Ireland, Portugal and Cyprus – until 75 percent of its debts are paid off, and this will be much stricter “in the first few years at least, than, say, it was for Ireland,” Wieser adds.

Regarding debt relief, Wieser tells that “an analysis will be conducted in the summer of 2018 and a decision taken upon the completion of the program.”

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