World Economy

Greece PM Rules Out Third Bailout

Greece PM Rules Out Third BailoutGreece PM Rules Out Third Bailout

Greece will not need a third international debt bailout when its current program ends in four months, the country’s prime minister has said.

Alexis Tsipras vowed his government would “start working hard” to change the country, which is saddled with a debt 175% of its GDP, BBC reported.

Greece has already received two bailouts since 2010, totaling 240b euros ($272b).

Germany’s parliament ratified a four-month extension on Friday. While some MPs had expressed doubts about the deal and there was substantial public scepticism in the EU’s leading economic power, the vote passed easily. Parliaments in all 19 eurozone states must approve the extension for it to be granted, but Germany’s vote is seen as significant because of its key role as a creditor nation.

Reacting to the Bundestag vote, Tsipras told the Euronews TV channel: “The German parliament gave Europe a vote of confidence today. “Europe has now recognized that Greece has turned a new page... We start working hard, in order to change Greece within a Europe that changes direction.”

  Bets Off

Greece remains frozen out of international debt markets, prompting speculation about a new bailout request. However, in a televised speech to his cabinet, Tsipras said Greece’s bailout agreements were “over both in form and in essence. Some people are betting on a third bailout in July... but we will disappoint them,” he said.

At the same time, Tsipras is committed to easing the hardship endured by Greeks, many of whom have seen their standard of living plummet since the financial crisis of 2008. He told the cabinet in Athens that the government’s first bill on Monday would be aimed at addressing what he called the “humanitarian crisis”.

Measures to be tabled, he said, would include supplying free electricity to poor families, as well as housing for 30,000 people and debt relief for some individuals and companies.

  Maturing Debts

As Tsipras spoke, communist opposition supporters protested outside to condemn the extension deal reached with Greece’s creditors, including the European Commission, the European Central Bank and the International Monetary Fund.

Even if the bailout extension is ratified by the entire eurozone, Greece still faces the formidable task of trying to service its debt obligations.

It will need to flesh out its reform program in detail by April and prove that reforms are bedding in before receiving a final disbursement of 7.2b euros.

In the meantime, it has to repay several billion euros in maturing debts, including about 2b euros to the IMF in March. Some 6.7b in ECB bonds is due to mature in July and August.

Greek Finance Minister Yanis Varoufakis suggested in an interview broadcast on Friday that his negotiating team had been deliberately vague in order to clinch the bailout extension.