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25th Jun 2022

Germany makes Greece pay with sovereignty for new bail-out

  • Angela Merkel got her way with a 'troika' on the ground in Greece (Photo: consilium.europa.eu)

Greek sovereignty was further undermined by eurozone leaders on Thursday (27 October), as Germany demanded a "durable" supervision on the ground of its economic policy-making under the terms of a second €130 billion bail-out.

The new rescue package, which comes with a 50 percent debt cut by private lenders and is to run until 2020, will include a "monitoring capacity on the ground" instead of current visits every three months by the troika of European Commission, International Monetary Fund (IMF) and European Central Bank lenders, the summit communique said.

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The aim of the mission will be to "advise and offer assistance in order to ensure the timely and full implementation of the reforms."

German Chancellor Angela Merkel pushed for the permanent presence instead of the current set-up, which sees the troika "coming and going every three months," she told journalists after the meeting.

As an afterthought, the leaders in their joint statement also referred to the EU commission-led "task force" of 25 experts who shuttle back and forth between Brussels and Athens and whose declared mission is also to help the government with reforms and tax collection.

"We fully support the task force on technical assistance set up by the commission," the summit declaration said.

On Wednesday, the head of the task force briefed journalists in Athens and defended the legitimacy of his unit, which had been formally asked for by the Greek Prime Minister Papandreou earlier this summer after EU commission chief Barroso and EU leaders convinced him to do so.

Papandreou also freely asked for the permanent troika, according to the summit conclusions.

Speaking to media on Thursday morning, Papandreou was thankful for the second bail-out and said that a default last year would have been worse than the 50-percent debt restructuring planned for January.

"We were guinea pigs for these bail-outs. We had to implement tough fiscal policies, we claimed European solutions," he said.

But there was no bad blood towards Merkel, at least in public statements.

"What the chancellor said fully complies with our position, we will be responsible in the implementation of this agreement. This will make a different country: more viable, more transparent," he said.

"The country that has been lending us money wishes that we succeed and we request their support. I would like them to be with us when there are issues and have discussions about it then, not three months later."

But ultimately, he stressed, nobody would be responsible for rebuilding the country other than "the Greek people, parliament and government."

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