Greek populism made adjustment worse, EU’s Dombrovskis says

26 September 2016
152 Views

Greece has had to go through tougher austerity than it would have otherwise been necessary, because of the populist stance of the left-wing government of Alexis Tsipras in 2015, European Commission Vice-President Valdis Dombrovskis said on Monday.

Tsipras, who took power in January 2015, rejected belt-tightening in public finances requested by lenders in exchange for emergency loans and reversed some of the reforms introduced by the previous Greek governments.

As new loans were frozen, Greece defaulted on the International Monetary Fund in July 2015 and had to introduce capital controls to prevent its banking system from collapse.

“Populism doesn’t solve problems. Populism creates problems,” Dombrovskis told a round-table in Riga in a discussion on the growing support for populist parties in many EU countries.

“We could see that in the … classic example of Greece. A new government came with a populist stance, that we don’t need any austerity regimes, we will spend as much as we want,” he said.

“And, in fact, Greece now implements tougher austerity measures than it would have been necessary if [reforms] of the previous government were continued at the time,” he said.

Dombrovskis said that because of the Tsipras government’s policies, Greece fell back into recession in 2015 instead of accelerating growth to 2.5 percent forecast had reforms been continued.

In August 2015 the euro zone and Greece agreed on a third bailout package involving more reforms in exchange for new loans and the first review of the reforms, although delayed by six months, was completed in June.

You may be interested

FYROM Foreign Minister: We were and will remain Macedonians
GREECE
shares67 views
GREECE
shares67 views

FYROM Foreign Minister: We were and will remain Macedonians

makis - Jan 19, 2018

Foreign Affairs Minister of FYROM Nikola Dimitrov clarified that his country’s interests in the negotiations with Greece over the name…

EuroWorking Group gives “go-ahead” for completion of 3rd review
FINANCE
shares77 views
FINANCE
shares77 views

EuroWorking Group gives “go-ahead” for completion of 3rd review

makis - Jan 19, 2018

The EuroWorking Group (EWG) is expected to issue a positive report for the completion of the third review of the…

Tsipras: Solution not only for name dispute, but also to irredentist rhetoric by FYROM
POLITICS
shares85 views
POLITICS
shares85 views

Tsipras: Solution not only for name dispute, but also to irredentist rhetoric by FYROM

makis - Jan 19, 2018

Greek PM Alexis Tsipras said his government was determined to reach a mutually acceptable solution on the name dispute with…

Leave a Comment

Your email address will not be published.