Creditors scold Athens but leave window of hope over debt relief measures

16 December 2016
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A statement by the country’s international creditors Thursday denounced the government’s controversial Christmas bonus payment for low-income pensioners but left a window of hope that the crisis will be overcome by leaving the decision for short-term relief measures to eurozone countries.

“Euro-area member-states will decide how to proceed with the short-term debt measures agreed in the Eurogroup meeting on December 5.”

Moreover, while the report stated the measures proposed by the Greek government raised “significant concerns on both process and substance as regards MoU commitments, especially regarding pensions” as it could jeopardize the safety margins around the fiscal targets of 2016, it said “that it would not essentially impact fiscal results for 2017 and 2018.”

“They raise risks regarding the targets, should the measures be extended in the future,” it said.

The statement came as the Greek Parliament approved the measure that had prompted creditors on Wednesday to respond with a freeze on a package of debt relief measures, as Greece, they said, not only had not consulted with them but had breached the terms of the bailout agreement signed in 2015.

The measure was approved by 195 votes, while 59 lawmakers from the main opposition conservative party voted present.

The leftist-left government stuck by its measures Thursday and insisted it had every right as a sovereign nation to help those in need with funds taken from its budgetary surplus.

However, the move infuriated Berlin and other eurozone countries as they had not given clearance for the move.

But not everyone was aggrieved, as some came to Greece’s defense, including French President Francois Hollande, who said his country supports short-term debt relief measures for Greece and that Athens cannot be asked to make any additional budgetary efforts.

“The Eurogroup has decided to ease Greece’s debt, still not sufficiently so. I support the Eurogroup’s position,” Hollande told reporters in Brussels while arriving for a summit of European Union leaders.

“We cannot ask Greece for additional efforts or prevent it from taking some sovereign decisions which respect the agreements made here in Brussels to find a solution for Greece’s future,” he added.

Financial Affairs Commissioner Pierre Moscovici echoed his sentiments: “We think the decision taken on debt relief is robust, was taken on the basis of Greece’s compliance with the first review, and therefore there is no reason to question it.”

Citing the need to maintain credibility with the Greek people and the country’s international lenders, Finance Minister Euclid Tsakalotos reiterated his government’s resolve to implement the measures, adding that Greece will not cave in to pressure to scrap it.

“The [Greek] people have to see that sacrifices of now six, seven years are at last starting to pay off,” he said during a visit to Berlin for a conference, adding that “if the unemployed, pensioners do not see that they have a role, a part in the growth after the crisis, then this Europe is in very, very serious trouble.”

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