Date
23 November 2017
Eurogroup chairman Jeroen Dijsselbloem and other eurozone finance chiefs backed the Greek reprieve after being presented with a list of reform by Athens. Photo: Reuters
Eurogroup chairman Jeroen Dijsselbloem and other eurozone finance chiefs backed the Greek reprieve after being presented with a list of reform by Athens. Photo: Reuters

Hard work begins after Greece wins eurozone reprieve

Greece has won a four-month extension of its eurozone financial rescue after creditors approved a reform plan.

In turn, Athens backed away from some contentious proposals and promised to keep its budget from being derailed by welfare spending, Reuters reported Wednesday.

Eurozone finance ministers convened by Eurogroup chairman Jeroen Dijsselbloem in a teleconference backed the extension after the new leftist-led Greek government sent him a detailed list of reform it plans to implement by the end of June.

The reprieve, expected to be ratified by some national parliaments in the coming days, averted an imminent banking meltdown and a potential state bankruptcy.

Tough negotiations lie ahead over the country’s longer-term economic future.

A Greek finance ministry official said the eurozone’s most heavily indebted nation will immediately start discussions with the European Union and the International Monetary Fund on this year’s financing shortfall.

“The discussions on Greece’s funding gap will begin tonight, tomorrow morning,” the official said.

Options include allowing Athens to issue more short-term T-bills and using European Central Bank profits on Greek bonds, he said.

Greek Finance Minister Yanis Varoufakis sent Brussels a six-page document on Monday that watered down campaign promises to end privatizations, boost welfare spending and raise the minimum wage, vowing to consult partners before key reforms and to keep them budget-neutral.

In a statement, the 19-nation Eurogroup urged Greece to develop and broaden the list of reform measures, based on “the current arrangement” — a euphemism for the bailout agreement which Prime Minister Alexis Tsipras had vowed to scrap.

IMF managing director Christine Lagarde said the reform plan was “not very specific”, and much clearer assurances would be needed on key reforms of pensions, taxation and privatization.

ECB President Mario Draghi gave the list a guarded welcome and said he would keep a close watch on ideas that depart from previous pledges.

He warned the radical new government in coded central banker language against plans to help Greeks walk away from their private tax and mortgage debts.

– Contact us at english@hkej.com

CG/RA

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