Wednesday 25 April 2018

Greece's bailout extension will be a relief to Taoiseach Enda Kenny

Enda Kenny after giving his address at Fine Gael’s National Conference in the TF Royal Hotel, Castlebar. Photo: Mark Condren.
Enda Kenny after giving his address at Fine Gael’s National Conference in the TF Royal Hotel, Castlebar. Photo: Mark Condren.
Colm Kelpie

Colm Kelpie

The deal to extend Greece’s bailout will be a relief to Taoiseach Enda Kenny because any debt concessions for the country would have reflected poorly on the Government here, an analyst has said.

As Greece prepares a package of economic reforms in exchange for the four-month extension, Cantor Fitzgerald Ireland said the threat of a Greek exit from the Eurozone has been averted, for now.

The agreement reached between Eurozone finance ministers on Friday night removed the immediate threat of Greece running out of money next month and possibly being forced from the single currency.

But it was a defeat for Greek prime minister Alexis Tsipras, whose Syriza party swept to power last month on promises to end austerity and renegotiate the current bailout.

As recently as the beginning of last week, the Greek government vowed it would not extend the current bailout. 

Mr Tsipras has insisted Greece achieved a negotiating success, and Greeks reacted with relief that Friday's deal averted a banking crisis.

Cantor Fitzgerald Ireland Analyst Ryan McGrath said this morning that the agreement announced by Eurogroup on Friday allowed all parties to claim victory.

“For the time being, Europe can relax until we get another round of brinkmanship in four months time , when Greece will once again protest but ultimately comply,” Mr McGrath said, in a note to investors.  

“While the agreement between Europe and Greece potentially frees up some money to meet at least some of the pledges made by Tsipras before last month’s election, the outcome would have been a relief for Enda Kenny and the Irish government, who aligned itself firmly alongside Europe's fiscal hawks during the standoff.

“Any debt concessions granted to Greece would have reflected poorly on the Irish governments’ debt deal efforts over the last number of years, who opted for a middle ground deal, comprising of debt extensions with improved costs rather than a the more extreme approach that Syriza has thus far adopted.”

Mr McGrath said the deal was also a “setback for anti-austerity parties across Europe”, as Syriza’s policies remain subjected to monitoring by the International Monetary Fund, European Commission and European Central Bank.

“The Irish government will no doubt be hoping this remains the case,” Mr McGrath said.

Mr Tsipras maintains he has his country behind him despite staging a climb-down in Brussels.

Online Editors

Business Newsletter

Read the leading stories from the world of Business.

Also in Business