Prevention of 'horror scenario' for Athens hailed


GREECE’S GOVERNMENT has hailed a second bailout agreement struck in Brussels yesterday morning as a historic development that prevented a “horror scenario” and ensures Athens will stay in the euro zone.

“This is long-term support for the clear political decision that Greece is and will remain a member of the euro zone, whatever happens,” finance minister Evangelos Venizelos said yesterday evening after his return to Athens.

“What we have is the clear, explicit commitment of our peers that they will support us even after the end of the programme, until Greece returns to the markets,” added Mr Venizelos, who described the “great, painful and complicated negotiations” as the “perhaps the most important” in his country’s postwar history.

He emphasised that not only did the deal involve a €130 billion support programme, it also paved the way for the government to slice €107 billion off its debt through a related write-down deal with its private lenders.

While most of the country’s media shared the government’s upbeat line, some insisted there was no cause for celebration given the conditions attached to the agreement.

“The country has been presented with increased international economic control, special [escrow] accounts and a host of onerous measures to avoid bankruptcy,” the To Vima newspaper said. “For this reason, no one can be proud of what happened in the country in recent years.”

But in successive interviews throughout the day, government spokesman Pantelis Kapsis sought to dismiss fears of a loss of sovereignty. “There will be some kind of delegation that will help with the collection and correct evaluation of the data. That’s all. It is nothing dramatic,” he told Mega television.

Also welcoming the deal was Antonis Samaras, the centre-right New Democracy leader and most probably the country’s next prime minister. He added, however, that anti-recessionary measures were needed to help the ailing economy.

“Without the rebound and growth of the economy . . . not even the immediate fiscal targets can be met, nor can the debt become sustainable in the long term,” he said.

But with unemployment touching 21 per cent and the economy contracting at a rate of 7 per cent, there were warnings that the deal spelt disaster.

“This is just another episode in a long sequence of sorry episodes that leads to the adventure of the disintegration of the euro zone,” said Yanis Varoufakis, an Athens University economics professor who has been outspoken in his criticism of the austerity approach to the debt crisis taken by euro zone governments.

“It’s one thing for me to be pessimistic and to judge that the programme is unworkable, but it’s quite another one for the itself to come up with its own debt sustainability report that confirms that it would take the coincidence of quite a few miracles to achieve the stated targets,” he added.