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Greece ‘turning a page’ as eurozone declares crisis over

  • Published at 12:38 am June 23rd, 2018
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The eurozone ministers’ agreement comes nearly a decade after Athens finances spun out of control, sparking three bailouts and threatening the country’s euro membership

Greek Prime Minister Alexis Tsipras on Friday said the country was “turning a page” after eurozone ministers declared its crisis over as they granted Athens debt relief under a bailout exit strategy.

The eurozone ministers’ agreement comes nearly a decade after Athens finances spun out of control, sparking three bailouts and threatening the country’s euro membership.

“Yesterday [Thursday] we reached a historic agreement on Greece’s debt with the Eurogroup,” Tsipras told the country’s president, Prokopis Pavlopoulos.

“We are turning a page,” he said, adding that Greece had to remain on the path of reform.

Following the eurozone ministers’ hard-fought agreement declared earlier Friday, Greece is slated to leave its third financial rescue since 2010 on August 20.

“The Greek crisis ends here tonight,” said EU Economic Affairs Commissioner Pierre Moscovici, after marathon talks in Luxembourg.

The deal was expected to be an easy one, but last-minute resistance by Germany -- Greece’s long bailout nemesis and biggest creditor -- dragged the talks on for six hours.

The ministers agreed to extend maturities by 10 years on major parts of its total debt obligations, a mountain that has reached close to double the country’s annual economic output.

 No illusions

They also agreed to disburse €15bn ($17.5bn) to ease Greece’s exit from the rescue programme. 

This would leave Greece with a hefty €24bn euro safety cushion, officials said.

“The Greek government is happy with the agreement,” Greek Finance Minister Euclid Tsakalotos said after the talks.

But “to make this worthwhile we have to make sure that the Greek people must quickly see concrete results... they need to feel the change in their own pockets,” he added.

The eight-year crisis toppled four governments and shrank the economy by 25%. Unemployment soared and still hovers over 20%, sending thousands of young educated Greeks abroad.

Optimism is tempered by Greece’s remaining fiscal obligations, which will demand serious discipline, observers say. 

Under pressure from its creditors, Greece has already agreed to slash pensions again in 2019, and reduce the tax-free income threshold for millions of people in 2020.

Further cuts will be made to maintain the 3.5% surplus, if necessary.

The European Commission has already specified that Greece will remain under fiscal supervision until it repays 75% of its loans.

Athens has received €273.7bn in assistance since 2010, enabling it to avoid punishing borrowing rates on debt markets.