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EU: Greece needs a new agreement with creditors

GREECE (OBSERVATORY) –¬†Greece needs a new agreement with the creditors of the euro zone government, after it withdraws from the financial assistance program on August 20 to ensure continued reforms and fiscal discipline, European Commissioner for Economics Pierre Moscovici said.

Greece has received more than 200 billion euros of loans from euro-zone governments in three financial rescue programs since 2010, and some lenders are concerned that Athens will repay loans over the next decades or cancel the reforms that have already been implemented, so the country will again face economic problems.

“We will need to agree on a post-program agreement that will facilitate the further implementation of the reforms adopted in the coming years, as well as a reasonable fiscal policy, but this will not become a new disguised program (financial rescue),” Moskovici said in a prepared statement that would be is presented in a speech at the Peterson Institute of International Relations in Washington.

After Greece withdraws from the aid program in August, it will regain full sovereignty in its fiscal policy, subject only to a less detailed annual analysis of creditors in so-called post-program monitoring.

But many eurozone countries are concerned that this will not be enough, especially since the refusal of formal control over the eurozone will be a decisive political achievement for the left-wing government of Greek Prime Minister Alexis Tsipras.

To ensure that Greece does not change the direction of reforms in the coming years, its creditors are considering the issue of additional debt relief, the size of which is likely to be related to the country’s economic growth.

This may entail additional conditions and maintain control over the country’s finances on the part of the euro area for many years.