Bloomberg, FAZ take strict line with Greek debt, reforms; Tsipras says latest deal ‘absolutely defensible’

14 April 2017
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“Stop Pretending on Greek Debt” was Bloomberg’s headline on Thursday regarding ongoing negotiations, deliberations and handwringing over the country’s debt load – an issue that has split the Greece’s creditors into two camps: the IMF on one side and Eurozone partners-cum-lenders, on the other.

“…For the past seven years, the International Monetary Fund and euro-zone institutions have supported Athens with loans in exchange for fiscal austerity and structural economic reform.This strategy has failed to break Greece’s vicious circle of a shrinking economy and higher debt.Europe needs to bring this spiral to an end without further delay — by putting Greece’s debts on a credibly downward path,” was how Bloomberg’s editorial began, a week after the most recent agreement between the increasingly beleaguered Tsipras government and institutional creditors.

In an even sharper tone, Frankfurter Allgemeine Zeitung heaped criticism on the leftist-rightist coalition government in Athens over the course of reforms signed off by the current administration as far back as August 2015.

“Athens is deceiving its creditors” was headline of the German-language article by the pro-business FAZ, which claimed that the leftist Greek government’s attempt to delay long-overdue reforms creates a risk of an economic “forced landing”.
“… the third bailout and lending program for Greece expires in 2018… yet the country is still far away from a minimum degree of fiscal restructuring,” FAZ said, while expressing uncertainty over whether the Greek state can assume the full management of the economy after the end of the current program.

In expressing a completely different perspective, Greek Prime Minister Alexis Tsipras told members of his Cabinet on Thursday that last Friday’s agreement, in principle, with creditors was “absolutely defensible”.

In statements that touched on the more positive aspects of the agreement, as the government views them, but without reference to agreed to pension cuts in 2019 and looming income taxes for lower-income taxpayers in 2020, Tsipras dismissed opposition criticism that his government was responsible for the year-long delay in concluding the second review of the Greek program. Instead, he maintained, the delay was due to the IMF, “something recognized by the EU Commission”.

Although a draft agreement was hashed out on the margins of a Eurogroup meeting in Malta last Friday, the development must still be composed on the paper and presented as a staff-level agreement that will be approved by Euro zone finance ministers at a coming Eurogroup meeting.

Tsipras also told ministers that the IMF “failed to completely fulfill any of its goals”, regarding the Greek program.

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