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Greece under tight watch post-bailout, can be a ‘success story’: ESM

Greece under tight watch post-bailout, can be a 'success story': ESMGreece under tight watch post-bailout, can be a ‘success story’: ESM

By George Georgiopoulos

ATHENS (Reuters) – Greece will be more tightly monitored after it exits its bailout program than other euro zone countries that received similar loans, the head of the bloc’s rescue mechanism told a Greek newspaper on Sunday.

Athens is set to exit its latest bailout on Aug. 20 and rely on bond markets thereafter to refinance its debt after a near nine-year debt crisis that shrank its economy by a quarter and forced it to implement painful austerity measures.

“Greece is exceptional. It has received much more loans from us than any other country,” European Stability Mechanism (ESM) Managing Director Klaus Regling told Ethnos newspaper in an interview.

Portugal, Ireland, Spain and Cyprus, which borrowed from the ESM, were also monitored after the end of their assistance programs.

“No other program country has received anything comparable. Therefore, the monitoring will be tighter than in the other cases and this will take the form of the so-called enhanced surveillance,” he said.

Since its debt crisis erupted in early 2010, Greece has relied on the biggest bailout in economic history, more than 260 billion euros lent by its euro zone partners and the IMF.

Regling told the paper that enhanced surveillance, which was agreed by the European Commission in July, aims to ensure there will be no backtracking on reforms and the fiscal path agreed with Greece’s lenders.

Under the tight monitoring, officials from European institutions including the ESM will visit Athens every three months for an assessment.

“As Greece’s biggest creditor by far, the ESM also wants to make sure that we will be repaid. We are a very patient creditor. But we do want to be repaid. So we will follow developments in Greece very closely,” Regling said.

Regling said he got “a lot of extra gray hair” in the summer of 2015 – the toughest period of the nine-year debt crisis – given the big clash between the leftist-led Greek government and its euro zone partners which led Athens to the brink of crashing out of the euro.

But, he said, Greece can be a “success story” just like Portugal, Spain, Ireland and Cyprus as long as it continues to work on restoring its partners’ trust.

“(The end of the bailout) is great news! The Greek people should celebrate. From my visits to Athens, I have come to really appreciate Greek wines. But tomorrow, I will celebrate it with a good glass of ouzo,” Regling told the paper.

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Source: Investing.com

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