PM vows austerity is over after deal
Fiscal reforms called ‘success’
Greece’s era of austerity is over, Greek Prime Minister Alexis Tsipras claimed Friday, as he painted a positive picture of the reforms his government has agreed to take after the bailout program ends in 2018.
Speaking in parliament, Tsipras described the deal reached Monday as an “exceptional success” and said it showed the country’s creditors accepted Greece’s insistence that it could no longer bear further budget austerity. “I am fully convinced we achieved an honourable compromise,” Tsipras said, adding that all sides at the eurozone finance ministers’ meeting in Brussels had agreed for the “first time after seven years ... to leave the path of continued austerity behind us.”
On Monday, Greece agreed to legislate new reforms to come into effect in 2019, but said these will be fiscally neutral: for every euro’s worth of new burdens on the Greek taxpayer, an equal amount of relief will be granted.
In return, Greece’s creditors agreed to send their bailout inspectors back to Athens next week for further talks to complete a long overdue review of Greece’s progress in its bailout program.
Greece’s central bank chief warned Friday that the bailout talks must be concluded as soon as possible.
“If the negotiations drag on with no agreement in sight, then Greece will enter a new cycle of uncertainty, deteriorating relations with our partners and creditors, and a backsliding of the economy into stagnation,” Yannis Stournaras said in a speech.
He warned that risks “also arise from delays and procrastination in implementing reforms already agreed on, or from distortions to competition that could hurt crucial sectors of the economy.”
Fitch ratings agency left Greece’s credit rating unchanged at CCC, near the bottom of the rating scale.