World Economy

Debt Relief Top Priority

Debt Relief Top PriorityDebt Relief Top Priority

Alexis Tsipras has taken the oath of office for a second term as Greek prime minister, promising to revive the crippled economy following an unexpectedly clear election victory.

The firebrand leftist solidified his position as Greece’s dominant political figure in Sunday’s election, but faces a dauntingly long to-do list, which includes implementing austerity policies and dealing with an unprecedented number of asylum seekers landing on Greek shores, ABC/AFP reported.

Voters gave Tsipras and his Syriza party the benefit of the doubt over a dramatic summer U-turn, when he ditched his anti-austerity platform to secure a new bailout and avert ‘Grexit’, a Greek exit from the eurozone.

Tsipras is expected to name a coalition government by Wednesday to begin applying the terms of the EU bailout.

The European Commission congratulated Tsipras on his left-wing party’s re-election, but said Greece had “no time to lose” in implementing the reforms agreed as part of its bailout, president Jean-Claude Juncker said in a letter to Tsipras. “There is a lot of work ahead and no time to lose,” he said.

The first review of Greece’s bailout program is due next month.

 First Crucial Battle

A Syriza party official said Tsipras’ first domestic goal would be to stabilize banks and the wider economy, still reeling from three weeks when banks were shut before Tsipras accepted the bailout.

Tsipras had described the quest for debt relief from the creditors as his “first crucial battle”, the official added.

He said Greece’s economy could not recover from one of the worst depressions to hit an industrialized country in modern times unless the burden of servicing its debt is eased.

Some European governments, particularly Germany, are opposed to writing off part of Greece’s debt but less averse to stretching out its repayment schedule.

Eurozone officials told Reuters last week that governments were ready to cap Greece’s annual debt-servicing costs at 15% of its economic output over the long term, so that nominal payments would be lower if the Greek economy struggles.

JP Morgan analyst Malcolm Barr said some form of restructuring of Greece’s eurozone debt should be in place by the end of March.

 Biggest Challenges

Earlier a commission spokesman said Greece’s creditors—the EU, the European Central Bank and the International Monetary Fund—were expected to meet in the next few weeks to conduct a review aimed at releasing new funds under the bailout deal.

“Many of the biggest challenges facing the European Union as a whole are the same as those facing Greece as a country, such as the refugee crisis and the creation of sustainable growth and jobs,” Donald Tusk, the president of the European Council,  said, adding he expected the new government in Athens “to contribute constructively” to rising to those challenges.