Tuesday

14th Aug 2018

Opinion

Greek government's steady steps to exit bailout programme

  • The Greek government aims at strengthening the welfare state, reinstating labour rights and collective bargaining, lowering unemployment rate, says Dimitris Papadimoulis, a vice-president of the EU parliament (Photo: Odysseas Gp)

The Greek government is moving towards the conclusion of the bailout program and the tough financial monitoring.

It is also preparing the steps for the reform program that will be implemented in the post-memoranda period, starting from August 2018.

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In February's Eurogroup Mario Senteno, Commissioner Pierre Moscovici and head of European Stability Mechanism (ESM) Klaus Regling reaffirmed the positive developments of the Greek economic program towards the third bailout review.

They all pointed out that a couple of technical issues should be finalised so that the disbursement of the €5.7bn tranche can be released after the scheduled Eurogroup meeting next month.

In the meantime, discussions between the Greek government and its creditors have been accelerated, referring to the preparation of a growth-oriented agenda 'made in Greece'.

This agenda should embark on the major challenges of the economy, such as the continuation of reforms and financial stability, the improvement of public administration and the creation of a business-friendly environment via a stable and concrete legal framework.

In addition to that, the Greek government aims at strengthening the welfare state, reinstating labour rights and collective bargaining, lowering unemployment rate.

These priorities will be the pillars of policy-making after August 2018, as the Greek government will have the power to design its own reform programme.

The European Commission's growth projection for 2018-19 is positive, investment climate is improving, exports are increasing, and competitiveness of the domestic economy is keep thriving, while unemployment rate is steadily falling, i.e. from 27 percent in 2014 to 20.5 percent in late 2017.

Credit upgrade

Furthermore, international credit agencies have upgraded Greece's outlook, thus inciting global investors to turn their interest on the Greek market.

The reflection of positive macroeconomic indicators in real economy takes time and necessitates more efforts. Nonetheless, Greece is on positive track and the government should keep up on its commitment to get rid of austerity.

The further decrease of unemployment and the protection of labor rights can contribute to wage increase and better living standards, boosting also the capacity and productivity of the Greek economy.

We should not forget that three years ago, when Syriza party got in power, Greece was a 'wreck', a place where numerous corruption scandals and nepotism were thriving, with extremely high rates of social inequality, vested interested taking advantage of public funds, and wide scale phenomena of anomy in most areas of public policy.

It is also very important to stress out that the long-awaited conclusion of the bailout programme does not mean that in one night we are entering the paradise.

The Greek government has to be consistent and determined in its actions, avoid mistakes of the past, improve weak policy aspects, and accelerate the implementation of reforms that have a more left-leaning and progressive political reference.

In European level, Syriza along with other progressive political forces are contributing to the debate on institutional reform in EU and Eurozone, paving the way for distancing policy-making from failed austerity policies and 'Schaueble's doctrine'.

These reforms should take a final shape, become elaborated and put on track in order to avoid another crisis similar to the one experienced back in 2008, that also led to the surge of far-right.

Although the European economy is recovering, EU leaders have not yet addressed the deep-rooted structural problems of the European establishment.

In this context, Greece's exit from memoranda gives a strong signal for the EU to move towards another political direction, deepen pro-social and sustainable policies and enhance democratic legitimacy and transparency, against the obsolete and dismantling political narrative of the populist, conservative and far-right forces.

Dimitris Papadimoulis is a vice-president of the European Parliament, and head of the Syriza party delegation

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