EU executive: Greece will exit bailout without backup loan

EU executive: Greece will exit bailout without backup loan
The Associated Press

ATHENS, Greece (AP) — Greece should emerge from its third and final bailout in a few months’ time without the need for a backup loan from its creditors, European Commission President Jean-Claude Juncker said Thursday.

Juncker spoke after meeting with Prime Minister Alexis Tsipras ahead of a eurozone finance ministers’ meeting in Sofia, Bulgaria, where Greece’s finance minister will present his country’s post-bailout plans.

Greece’s central bank has advocated the country take a so-called “precautionary credit line” after it exits its bailout this August, in order to ease it back into the global financial markets it lost access to in 2010. But the move could be politically unpopular as it would likely involve the imposition of yet more austerity measures and heavier international oversight of the Greek economy.

“There will be no precautionary line because we must do everything so that Greece’s exit from the program is the clearest and cleanest possible,” Juncker said at a joint news conference with Tsipras.

The Greek prime minister said his country was “very close to achieving and we will achieve what we call a ‘clean exit’.”

“That is what happened with other countries that were in a program and completed them successfully,” he said.

Tsipras’ left-led coalition government has promised lenders it will continue infrastructure privatization and draconian spending controls after the bailout program ends in late August, in exchange for more favorable repayment debt terms.

Juncker praised Greece’s progress so far, noting it had managed to turn a budget deficit that stood at 15.1 percent in 2009 into a budget surplus of 0.8 percent in 2017.

“It is absolutely remarkable,” Juncker said, “and it is now (time) to consolidate the results.”

He stressed Greece must continue to implement the reforms it has committed to, which include further spending and pension cuts, tax hikes and an ambitious privatization program.

“We will now have to concentrate on the problem of reducing the debt,” he said, adding that all EU member states should adhere to commitments they have made.

Greece’s creditors have promised to provide some form of debt relief to help the country get back on its feet.

“We are close to a very important target to settle the outstanding issues that remain for debt relief measures,” Tsipras said. He noted that the better-than-expected performance of the Greek economy was “a pleasant surprise for all our partners over the last three years and was instrumental in rebuilding the trust that was lost … but it is a fact that Greece, the Greek government, promised many things for many years but did not abide by many of their commitments.”

Greece has depended on international bailouts since 2010, and has had to push through stringent austerity measures in return. At the height of the crisis Greece repeatedly came to the brink of crashing out of the euro, the common currency used by 19 EU members.

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