Editorial: The debt settlement and the truth
The government may have rushed to celebrate the short-term measures for the debt…
The government may have rushed to celebrate the short-term measures for the debt that were approved on Monday, but in essence the only practical and direct effect is that they pave the way for Greece to be included in the ECB’s quantitative easing program.
Definitely positive but not enough for the situation we are in today. From the other side it is rather clear, based on the Eurogroup statement, that the goal of a 3.5% surplus targets is not only not abandoned, but is a given for the mid-term, namely 3 to 5 years.
Although the measures for the debt are short-term, they will effectively contribute towards relieving the debt after 2030. The announcement now aims to help the IMF overcome its hesitations regarding its continued participation in the Greek program. After all Dijsselbloem clearly suggested so, when he clarified that the mid-term measures will be debate in 2018, after the program successfully concludes, in order to jointly review the sustainability of the Greek debt with the IMF.
It is clear that the situation in Europe at the moment did not allow anything other than a small gift that would not necessitate the approval of national parliaments. Given that they made the promise in 2012 and reconfirmed in May last year, they could not ignore their pledge once again.
On the other hand their persistence on certain measures in order to close the second review is clear. The head of the Eurogroup noted that there are important structural measures that need to be taken so that the 3.5% surplus is sustainable and can be achieved for a number of years. The statement clearly describes measures that support growth and improve competition, including further meaningful reforms in the labor market, the deregulation of protected professions and lifting barriers on investments.
Even though the government insists that it will not accept new measures in labor matters, it is obvious that they are on the table. The new negotiations with the troika in the next few days will not be a walk in the park. Today’s celebrations may easily turn into ineffective cried of “resistance”.