Greek min­is­ter sees progress de­spite lat­est drama on debt

Bailout pack­age put on hold over spend­ing

The Washington Times Daily - - WORLD - BY DAVID R. SANDS

It was a chain of events which neatly cap­tured the grind­ing eco­nomic cri­sis that plagues Greece: Just as a light ap­peared at the end of the tun­nel, the train broke down once again.

In an in­ter­view last week, new Greek Econ­omy and De­vel­op­ment Min­is­ter Dim­itri Pa­padim­itriou said he was “very op­ti­mistic” the coun­try had “turned the cor­ner” ad­dress­ing a crush­ing six-year pub­lic debt cri­sis that has left it wran­gling with its fel­low European Union mem­bers and the In­ter­na­tional Mone­tary Fund over bailouts, aus­ter­ity and the best way to jump-start the econ­omy.

He cited increasing busi­ness con­fi­dence at home, pro­jec­tions that the Greek gross do­mes­tic prod­uct growth will con­tinue to out­pace EU av­er­ages, and what he said was the very pos­i­tive re­cep­tion from U.S. in­vestors dur­ing a visit to New York ear­lier in the week. GDP ex­panded at an an­nual pace of 1.8 per­cent in the three months to the end of Septem­ber, and the min­is­ter said it was re­al­is­tic to see that growth rise to a rate of 3.1 per­cent by 2018.

The min­is­ter, who took his post just last month in Athens af­ter nearly 40 years teach­ing eco­nom­ics at New York’s Bard Col­lege, said it was not just hedge fund man­agers who ex­pressed an in­ter­est in tak­ing a chance on the im­prov­ing Greek econ­omy.

“These were real in­vestors,” he said. “Peo­ple tell me that they wouldn’t even have talked to us a year ago, but now it’s time to take a sec­ond look” at the pos­si­bil­i­ties of in­vest­ing in Greece.

But on the day the min­is­ter was speak­ing, the lat­est row be­tween Athens and its cred­i­tors was play­ing out across the At­lantic.

Rep­re­sen­ta­tives of the European Sta­bil­ity Mech­a­nism, the bailout fund set up by the eu­ro­zone coun­tries, said they were sus­pend­ing the lat­est debt re­lief pack­age agreed to Dec. 5 to protest a new burst of so­cial spend­ing by the left-wing govern­ment of Greek Prime Min­is­ter Alexis Tsipras, in­clud­ing a $650 mil­lion Christ­mas pay­out to Greek pen­sion­ers that cred­i­tors say vi­o­lated the agree­ment. The Greek stock mar­ket fell over 3 per­cent on news of the lat­est im­passe.

Mr. Tsipras con­tended the hol­i­day bonus — and pro­posed tax breaks for Greeks liv­ing in Aegean Sea is­lands deal­ing with a heavy in­flux of mi­grants from the Mid­dle East — do not vi­o­late the lat­est debt re­lief pack­age, and law­mak­ers in Athens ap­proved the pay­out in a vote Thurs­day.

The episode neatly en­cap­su­lates the political and fi­nan­cial dilemma fac­ing Greece since the debt cri­sis be­gan. Prod­ded by EU cred­i­tor na­tions led by Ger­many, Greece has adopted a string of ben­e­fit cuts, tax in­creases and la­bor-mar­ket re­forms in or­der to ob­tain res­cue loans needed to avoid bank­ruptcy and a forced exit from the eu­ro­zone. Mr. Tsipras, whose left­ist rul­ing party trails the con­ser­va­tives in the polls ahead of pos­si­ble elec­tions next year, has had to walk a tightrope try­ing to keep the coun­try’s cred­i­tors happy while deal­ing with vot­ers who have faced years of high un­em­ploy­ment and ser­vice and ben­e­fit cuts.

Mr. Pa­padim­itriou walked a sim­i­lar line in the in­ter­view, not­ing Athens has al­ready made some hard choices to re­pair its fi­nances but that some of the rec­om­men­da­tions com­ing from Greece’s EU cred­i­tors and the IMF “make no sense” if the coun­try is to build on past gains and sus­tain growth in the fu­ture.

Pa­padim­itriou

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