Thursday 21 September 2017

Difficult road lies ahead, warns Greek PM Alexis Tsipras

With a deal, of sorts, to keep Greece in the eurozone, Prime Minister Alexis Tsipras marked his first month in office this weekend acknowledging that only now does the hard work begin (REUTERS/Alkis Konstantinidis)
With a deal, of sorts, to keep Greece in the eurozone, Prime Minister Alexis Tsipras marked his first month in office this weekend acknowledging that only now does the hard work begin (REUTERS/Alkis Konstantinidis)

Helena Smith

With a deal, of sorts, to keep Greece in the eurozone, Prime Minister Alexis Tsipras marked his first month in office this weekend acknowledging that only now does the hard work begin.

Facing a 48-hour deadline to produce reforms that could make or break his insolvent country’s future, the anti-austerity leader admitted the honeymoon was over for a government that had sent ripples of hope through Europe.

In a sombre address, hours after a dramatic meeting of euro- group finance ministers in Brussels, Mr Tsipras said that, while Athens under the stewardship of his radical left Syriza party had for the first time embarked on “real negotiations” with its creditors, a “long and difficult struggle lay ahead”.

“We have won the battle but not the war,” he said. “We showed that Europe can be an arena of negotiation and mutually acceptable compromise and not an arena for exhaustion, submission and blind punishment . . . but negotiations did not end yesterday.”

Five years into Greece’s worst crisis in modern times, the relief was almost audible in the voice of its prime minister. Weeks after assuming power, his leftist-led coalition has endured a baptism of fire amid acceptance by inexperienced officials that they are learning on the job. With bailout funds expiring next Sunday, keeping Greece afloat and in the single currency — while not being seen to ditch the anti-austerity platform on which Syriza was elected — has been a balancing actof almost existential proportions.

The programme, extended for four months under the agreement, stopped Greece from being shown the euro exit door but has come at a heavy price. Speaking to reporters after its announcement, Greek finance minister Yanis Varoufakis described the deadlines the new government had been forced to meet as “inhuman”.

The accord, in many ways, was not one that Mr Tsipras would have chosen. The spectre of capital controls being imposed on Greek banks that have haemorrhaged funds as anxious investors have rushed to withdraw deposits is believed to have forced Athens’s hand. On Friday, as eurozone finance ministers were about to discuss Greece’s fate, the country’s central bank announced that capital flight had reached €1bn that day.

The Greek government’s difficulties were summed up by Irish Finance Minister Mr Michael Noonan, who said: “Their political problem is that this is a reversal of their election position. There is absolutely nothing on the table

that could be considered a concession. They’re now compromising and compromising quite significantly,” he told RTE, but made it clear Athens had little choice. “The biggest threat to Greece was that their banking system would go belly-up next Wednesday.”

In the cafes of Athens there was consensus that what the country had essentially agreed to was the best of increasingly bad deals that inevitably would have been on offer. “The government won time, it got a four-month extension to the adjustment programme, but it was a lousy deal, and that’s because this new government managed to antagonise the euro group, the German government, the European Central Bank, Spain and Portugal from the outset with its negotiating stance,” said Giorgos Kyrtsos, a Euro-MP with the centre-right New Democracy party.

“And the response was to impose rules in a very strict manner . . . We have a huge financing gap that will present itself in the next few months,” he said. “It is a time-bomb. The government will not be able to service its debt and meet its government programme.”

Greece, still down to receive a last instalment of aid under its old bailout programme, has been told the €7.2bn tranche will only be disbursed once reforms are agreed and a review of its economic progress concluded at the end of April.

In a huge concession, Athens accepted continued oversight of its finances by officials representing the hated Troika, of creditors at the EU, ECB and IMF, albeit under a new name — the “institutions”.

Sunday Independent

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