With deal in bag, government shifts its focus to debt talks, QE

With deal in bag, government shifts its focus to debt talks, QE

The government on Tuesday shifted its focus to securing specific debt commitments from the country’s creditors after Greek officials and foreign auditors agreed on a raft of new economic measures following months of tough negotiations.

Finance Minister Euclid Tsakalotos told reporters the deal paved the way for talks on debt relief. He acknowledged that the agreement was not ideal. “We are satisfied with some things, less satisfied with others.”

Government spokesman Dimitris Tzanakopoulos called the deal “balanced and viable.” He said authorities planned to get it to Parliament for a vote by May 16.

The new measures – which include fresh pension cuts, tax hikes and changes to the labor and energy market – are to go to the House in one bill and the so-called countermeasures – chiefly social welfare benefits – in a separate bill, he said.

After the vote in Athens, the agreement will be the focus of a meeting of eurozone finance ministers on May 22.

The government is keen to secure the approval of bailout funds at that meeting but also the specification of measures for medium-term debt relief.

Achieving the latter will be a step toward gaining certification from the International Monetary Fund that the country’s debt is sustainable, which could pave the way for the IMF to back Greece’s third bailout and for the inclusion of Greek bonds in the European Central Bank’s quantitative easing program.

The deal was welcomed by Greece’s creditors, who, in a joint statement, said that it “will now be complemented by further discussions in the coming weeks on a credible strategy for ensuring that Greece’s debt is sustainable.”

European Monetary and Economic Affairs Commissioner Pierre Moscovici spoke of “a very positive development.” “It is time to turn the page on this long and difficult austerity chapter for the Greek people,” he said.

Prime Minister Alexis Tsipras is to defend the agreement at a cabinet meeting on Thursday and a session of leftist SYRIZA’s parliamentary group in the coming days.

Meanwhile, New Democracy leader Kyriakos Mitsotakis urged party officials to counter the government’s argumentation in the runup to a vote on the new measures in Parliament.

Describing the deal as a “national failure,” Mitsotakis said it was tantamount to a fourth bailout as it entails measures after the current bailout program ends next year.

“The fourth memorandum is a joint achievement of Tsipras and [Panos] Kammenos,” he said, adding that the deal has committed the country to measures beyond the current government’s term in office.

“This will not be our policy,” he said, denouncing the policy of heavy taxation pursued by the leftist-led coalition with the “tolerance of our partners who agreed with this option.”

The conservative leader also reiterated his call for political change through elections because, he said, the current government is a liability that has lost the confidence of the country’s creditors.

“They know that as long as SYRIZA is in power the real economy will continue to suffer,” he said.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.