Thursday

24th Sep 2020

Greece will exit bailout in 2014, PM says

  • Greek ministers unveil EU presidency logo as country tries to get back to normal (Photo: gr2014.eu)

Greece will exit its bailout agreement in 2014 and will not need any further loans, Greek Prime Minister Antonis Samaras said on Monday (December 30).

In an address on national television, Samaras declared that Greece would "venture out to the markets again" and "start becoming a normal country” in the new year. 


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He said it would “make the big step to exit the loan agreement."

The Mediterranean country’s debt “will be officially declared viable, meaning there’ll be no need for new loans and new bailout agreements,” he added.

Having originally sought an EU and International Monetary Fund (IMF) bailout worth over €100 billion in 2010, the value of Greece's rescue programme soared to €240 billion in 2012 - by far the largest for any eurozone country - as its economic woes deepened.

Private creditors accepted losses of around 50 percent as part of the deal.

Exiting its bailout would not bring an end to austerity, but would be a symbolic victory for Greece, which will assume the EU's six month rotating presidency on 1 January, aiming to improve the country's image after more than four years of political and social upheaval.

Ireland became the first eurozone country to exit a bailout in December when it announced that it would not require an emergency credit line from the EU as it returns to financial markets.

Portugal's three year programme is also due to finish in May.

Meanwhile, after six consecutive years of recession, Greece is hoping to reach 0.6 percent growth in 2014.

The country's creditors are less optimistic than its political leaders, however.

The IMF believes that Greece will need an extra €11 billion to fulfil debt repayments due in 2014.

Greece's economic output in 2013 was 25 percent lower than in 2007, while the jobless rate has soared to 27 percent - the highest in the EU.

Greece's debt burden has also tipped 180 percent, three times higher than the 60 percent threshold set out in the EU's rule-book, way up from pre-crisis levels of around 100 percent.

For his part, in an interview in the Bild daily on Tuesday (31 December), German finance minister Wolfgang Schaueble said the EU would stand by Greece if it continues to push through reforms to its public sector and labour market.

“We’ll decide in the middle of the year if we have to help Greece still further. If the country sticks to its course of reforms, if it fulfils the necessary conditions, we won’t turn our back on it,” he noted.

The Paris-based Organisation of Economic Co-operation and Development (OECD) says that Greece's economic hopes are unrealistic.

It predicts that Greece's economy will contract by 0.4 percent next year, putting further pressure on its public finances.

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