Greek Prime Minister Alexis Tsipras has insisted that the priority of his newly re-elected government is to deliver on its bailout promises so that the country can start tapping international bond markets for money by 2017.
His comments on October 5 to Greek lawmakers came as European creditors urged Tsipras to maintain his zeal for reforms in return for billions more of bailout cash and a promise of talks on relieving the country’s debt burden.
As a condition of July’s three-year 86 billion-euro ($96 billion) bailout agreement the country’s third since 2010 Greece has to overhaul its economy by reforming its labour markets, raising taxes, cutting spending and putting state investments up for sale. If it doesn’t, Greece would not be able to tap the bailout funds and would again face the prospect of bankruptcy and an exit from the euro.
“This government, during its four-year mandate, will set its seal on the country’s final exit from the crisis,” Tsipras told lawmakers at the opening of a three-day parliamentary debate on his government’s policy platform, which ends with a confidence vote late Wednesday. “I know that the road ahead will not be easy ... But at the same time this will be a period of hope.”
Greece will only have completely emerged from its crisis when it can independently and consistently borrow in international markets. Except for a brief period in 2014, it’s been unable to do so since 2010 when investors grew concerned about the country’s ability to service its sky-high debts. “Over the next 20 crucial months ... our target is to have restored market liquidity, and regained market access,” Tsipras said.
Tsipras’ address comes just a couple of weeks after his left-wing Syriza party unexpectedly won the general election by a wide margin despite a series of U-turns that ended up with July’s bailout agreement. Following the election, Tsipras reformed his previous coalition government with the small, right-wing Independent Greeks.
As part of the bailout, his government has to enact more onerous spending cuts and tax hikes. According to Monday’s draft budget, these will be worth €4.35 billion in 2016.
Tsipras said his government has “a clear mandate” and that it will “start a series of reforms that will radically change Greece.”
There was an acknowledgement among Greece’s European creditors that Tsipras has altered considerably since he first got elected on an anti-austerity platform in January.