Greece’s Tsipras says the era of austerity is over

Greece's Tsipras says the era of austerity is over

ATHENS, Greece — Greek Prime Minister Alexis Tsipras says the era of austerity is over for his country, painting a positive picture Friday of reforms the country has agreed to take after its latest bailout program ends in 2018.

Speaking in parliament, Tsipras described the deal reached Monday as an “exceptional success” and said it showed the country’s creditors accepted Greece’s insistence that it could no longer bear any further budget austerity.

“I am fully convinced we achieved an honourable compromise,” Tsipras said, adding that all sides at the eurozone finance ministers’ meeting in Brussels had agreed for the “first time after seven years … to leave the path of continued austerity behind us.”

On Monday, Greece agreed to legislate new reforms to come into effect in 2019, but said these will be fiscally neutral: for every euro’s worth of new burdens on the Greek taxpayer, an equal amount of relief will be granted.

In return, Greece’s creditors agreed to send their bailout inspectors back to Athens next week for further talks to complete a long overdue review of progress made in Greece’s bailout.

Tsipras said both creditor-requested new measures and government-proposed relief measures will be legislated at the same time, and that therefore there was no conditionality for the relief measures.

The prime minister’s left-led coalition government, trailing in polls, has presented the deal as a decisive, positive step forward for austerity-weary Greeks hammered by seven years of a financial crisis that plunged the country into an economic depression.

No details have been provided of what the new reforms will entail, although there is widespread speculation they will include a broadening of the tax base and further pension and labour reforms.

Finance Minister Euclid Tsakalotos left the Brussels meeting without making any statements explaining the deal, and provided no details during a brief appearance in parliament Thursday. Government spokesman Dimitris Tzanakopoulos on Tuesday said no specifics could be provided as the reforms were subject to negotiation and agreement with the country’s creditors.

Greece has depended on three international bailout funds since 2010, when it became locked out of bond markets by sky-high borrowing rates.

In return for the rescue loans, it has had to overhaul its economy, imposing rounds of spending cuts and tax hikes. The austerity saw the country’s economy contract by more than a quarter and sent unemployment soaring. The jobless figure now hovers at around 23 per cent, down from a high of 27 per cent.

Elena Becatoros, The Associated Press