Daily Management Review

Juncker says Greece Bail Out is on Shaky Ground, Greece says Bailout Deal Close


02/12/2017




Juncker says Greece Bail Out is on Shaky Ground, Greece says Bailout Deal Close
Greek Prime Minister Alexis Tsipras said he believed the drawn-out bailout review with them would end well and warned international lenders on Saturday not to heap new burdens on his country.

But since the International Monetary Fund had not decided what role it would play, the deal was "on shaky ground", said European Commission President Jean-Claude Juncker.
 
Moving closer to a deal that would secure new loan disbursements and save the country from default, Greece and its international lenders made clear progress towards bridging differences over Athens's fiscal path in coming years, and the comments came a day after those revelations.
 
"(The review) will be completed, and it will be completed positively, without concessions in matters of principle," Tsipras told a meeting of his leftist Syriza party on Saturday.
 
However it would be hard to swallow any further cutbacks, particularly to pensions which have already gone through 11 cuts since the start of the Greek debt crisis in 2010.
 
"We are ready to discuss anything within the framework of the (bailout) agreement and within reason, but not things beyond the framework of the agreement and beyond reason," Tsipras said. "We will not discuss demands which are not backed up by logic and by numbers."
 
He warned all sides to "be more careful towards a country that has been pillaged and people who have made, and are continuing to make, so many sacrifices in the name of Europe".
 
Greece had been hit by a multi-year recession brought on by the debt crisis and the austerity demanded in exchange for the bailouts and the country has just came out of it and therefore accepting more reforms is fraught with difficulties in the country.
 
The Greek economy contracted at a rate of more than 10 percent earlier in the decade and while year-on-year GDP growth was 1.8 percent in last year's third quarter, its unemployment rate is 23 percent.
 
Greece was paid for some of the steps it has already taken by Juncker, in an interview to be aired on German radio Deutschlandfunk on Sunday.
 
"No country has managed bigger steps to improve competitiveness than Greece," he said.
 
But as the IMF has not yet made up its mind whether to take part in providing more aid, the bailout program, Greece's third, could fall apart, said the Commission president.
 
"Yes, it is on a shaky ground in the sense that we don't see how the International Monetary Fund could manage this problem," he said.
 
The IMF does not want to be part of any program that could push Greece’s national borrowing to 275 percent of economic output by 2060 by  a never-ending cycle of indebtedness and hence the IMF has sat on the sidelines of the latest bailout program.
 
The IMF has been accused of being "cowardly," and of coming up with "new demands for Greece" by Tsipras and the relation between IMF and Greece has been testy since its first bailout in 2010.
 
"Absurd, imaginary unreal, it doesn't matter, as long as it is made to look like Greece is to blame," he said.
 
(Source:www.reuters.com)






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