PM: The post-bailout era is near
Tsipras hails results of Eurogroup as a success but debt relief, though raised, was deferred to next year
The government sought yesterday to dub Thursday’s agreement at the Eurogroup as a success, insisting that Athens “got what it wanted” and that a path to recovery has been cleared.
Prime Minister Alexis Tsipras, who briefed President Prokopis Pavlopoulos yesterday, described the results of the meeting of eurozone ministers as a “decisive step” for Greece as they sent a “clear message” to international markets, and made a “clear commitment” that by next year bailouts and memorandums will be a thing of the past.
The decision by eurozone finance ministers stipulates the disbursement of further bailout cash, amounting to 8.5 billion euros, and commitments – if not specific details – on future debt relief, which has been a key Greek demand. Moreover, the International Monetary Fund said it would be willing to offer monetary assistance if the debt relief measures – when they are outlined – are conducive to making the country’s debt mountain sustainable.
The release of the 8.5-billion-euro loan tranche took a growing burden off the coalition’s shoulders, as Athens will now be able to cover debt maturing in July.
However, the government’s narrative, up until Thursday’s Eurogroup, was that, in exchange for the harsh measures it passed into law last month, it was seeking specifics as to what sort of debt relief measures it can expect. This, according to its narrative, would pave the way for Greece’s inclusion in the European Central Bank’s quantitative easing (QE) mechanism – indeed, on the symbolic level, Tsipras has yet to wear a tie, as he promised to do so in 2015 if Greece’s debt is reduced.
But essentially none of these aims materialized on Thursday, as debt relief talks were deferred to 2018, while the prospect of Greece joining the ECB’s QE mechanism was all but secured. According to reports, it is highly unlikely that the ECB will decide to include Greek bonds in the QE program until the IMF decides that the country’s debt is sustainable.
According to a source quoted by Reuters yesterday, the ECB will need more clarity on what sort of debt relief Greece will get in order to allow it join the QE program. Moreover, a senior European official yesterday told Kathimerini “the way things stand now, the issue isn’t even be up for discussion.”