ECB Board Member Tells Greece: Reforms, Not Excuses

ATHENS – New Greek Prime Minister Antonis Samaras, still recovering from eye surgery to repair a detached retina, is not getting as much support from international lenders as he wanted in his bid to buy more time for the country to impose reforms and meet fiscal targets that were included in a deal he supported and signed.
Greece is surviving on $152 billion in rescue loans from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is planning to start disbursing a second bailout of $173 billion after checking the progress of long-delayed reforms. ECB Executive Board member Joerg Asmussen told the Economist Conference in Athens on July 2 that the country needs to speed the pace of reforms instead of trying to convince the Troika to grant more delays.
“The first priority for the new Greek government has to be getting the program back on track,” Asmussen said, referring to the coalition government overseen by Samaras, including his New Democracy Conservatives, and two reluctant partners, the PASOK Socialists and tiny Democratic Left party which lent their Parliamentary votes but not any of their members to the Samaras cabinet, a mix of technocrats and politicians.
Samaras said he wants to renegotiate the terms of the deal he signed and relieve the austerity measures that have worsened a deep recession, creating 22.6 percent unemployment, shrinking the economy by 6.5 percent and closing some 1,000 businesses a week. But Asmussem said that, “Delaying adjustment is risky… and it is also not free: it requires additional funding from the creditor countries, because the country still runs a primary deficit,” he added.
The government is bracing for a series of meetings starting on July 3 with Troika inspectors checking the Greek books, little more than two weeks after Samaras narrowly won the July 17 elections but without enough of the vote to form a government, requiring him to reach out to his Leftist rivals for support. “There is no silver bullet,” Asmussen said. He said that Greece must not lose time trying to renegotiate its international bailout but focus instead on getting its reform program, adding that policy implementation had virtually stalled over the past three months.
Speaking to the newspaper Kathimerini, Asmussen said that the Troika was willing to discuss tweaking certain aspects of the bailout deal on the condition that these changes do not affect its targets. “We were always open and we are open to discuss elements of the program as long as we keep the key goals of the program intact. So, let’s say, if he (Samaras) wants to change the mixture of the revenue and expenditure measures this can surely be discussed,” Asmussen said. But he added, “With respect to the key results and goals of the program to make Greece more competitive and to reach a debt sustainability situation, I do not see room for change.”