In 10 months, Greece will be released from the agreements that have effectively ruled it for the past seven years, and will once again become a normal country. This was, in essence, the message that Alexis Tsipras, the Syriza Prime Minister, wanted to emphasize in an interview given to the Athens daily newspaper Efimerida Syndakton.
“2017 is not the same as 2015,” he said, and tried explain why. On one hand, it is undeniable that the pressure from creditors, in particular from the International Monetary Fund, seems to have decreased notably lately. The Athens government aims to finalize the third evaluation of the application of the provisions in the financial assistance program by the end of the year.
It remains to be seen what will happen in concrete terms regarding labor laws, but it seems that the darkest period, that of the requests for the total deregulation of the labor market, is finally a thing of the past.
That said, the Syriza government will continue to push hard at the negotiating table on the issue of debt relief. This is a key chapter of the negotiations, on which Greece has received the support of the American administration, and even an unexpected positive signal from the Eurogroup President, Jeroen Dijsselbloem (who, however, is now at the end of his term).
Athens wants to try to stabilize its economic situation even more, in order to benefit from the European Central Bank’s quantitative easing program before its conclusion, slated, as of now, for September next year. But the real challenge is to exit from the program of outside control imposed by the memorandum on schedule. That would be in August 2018.
On the question of the timeframe, Tsipras was very clear that “the memorandum and the outside rule will end,” as he said in the interview. He also added that “there will be supervision, just as with all other European countries, and thus the status of the country’s public finances will be monitored.”
What Greece needs, after years of sacrifice, is to regain their full economic and financial sovereignty, and to be able to implement, in turn, a social policy program for the medium and long term.
This is why Tsipras reiterated that the budget surplus would be redistributed, probably later this year, in favor of the weaker social classes, who were hit hardest by the crisis.
The center-right is saying they are certain that, after the conclusion of the memorandum next year, Greece will be forced to sign another one in short order. But the Greek Prime Minister reminded the conservatives from New Democracy that when they were in power, they accepted the creditors’ demand to fix the primary surplus at 4 percent until 2030. Such goals, he adds, “would have certainly prevented the country from being able to function.”
For his part, the Minister of Finance, Efklidis Tsakalotos, said that it is likely that the country may once again make an appearance on the bond markets, “in order to manage our debt and make sure that government securities are more attractive after the evaluation of the application of the provisions of the financial support program.” Tsakalotos thus confirmed that the goal is for the country to return as soon as possible to being able to finance itself independently on the markets, and denies the possibility that new cuts will be approved.
We will have to see, of course, what the details of the agreement with the creditors will be regarding the future of survivors’ pensions, and in any case it will not be easy to follow the agreed upon provision for the primary surplus for 2018, which is fixed at 3.5% of GDP.
But the signal that is being sent is that the country is turning over a new leaf. And also that, as the elections will be held in 2019, the Tsipras government will in the meantime try to exploit any available leeway to support social policies and implement as much as possible of its program from 2015. Now out of the state of emergency, having avoided default at the cost of enormous sacrifices, the goal is to be able to reemphasize, in practical terms, a clear left-wing identity.