Print Edition - 2017-06-18 | MONEY
‘Greece not out of the woods yet’
Jun 18, 2017-
As Greece’s government on Friday welcomed a long-delayed bailout agreement, analysts warned the deal throws responsibility back on the struggling country to pull itself out of crisis.
Greek Prime Minister Alexis Tsipras said the agreement—hammered out by the International Monetary Fund (IMF) and eurozone finance ministers—opens the way to a “final exit to the crisis”.
Reached Thursday, the deal averted another summer of Greek crisis by clearing the way for seven billion euros of debt repayments due in July.
Payment of the latest tranche of Greece’s 86-billion euro ($97-billion) bailout, agreed in 2015, had been held up for months by a row over its needs for debt relief which has pitted bailout-weary Germany against the IMF.
But some analysts reacted lukewarmly to the deal. They objected that it relies on optimistic financial projections and fails to provide longer-term reassurance to markets about Greece’s debt and the health of its economy.
“Creditors will need to make more realistic forecasts and grant the debt relief that this implies is needed to convince financial markets that Greek debt is sustainable and allow it to finance itself,” said Jennifer McKeown, economist with Capital Economics.
Looming over the deal is the question of Athens’ debt, which stands at a staggering 180 percent of annual output after three bailouts.
But with only a few months before the legislative elections in Germany, Berlin ruled out making any further commitments to debt relief.
The “Grexit danger has been reduced again,” but “Tsipras won nothing”, business think tank Iove director Nikos Vettas told AFP.
Now it is up to the Greeks to pull the country out of its slump, added Vettas.
Greek media outlets spent Friday puzzling over the question of whether the glass is “half empty or half full”, said Panayotis Petrakis, economy professor at the University of Athens.
Published: 18-06-2017 08:44