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Think again warn creditors after Greeks mull easing austerity


economy

Think again warn creditors after Greeks mull easing austerity

The Greeks had been looking forward to some cheer from their government soon, with finances improving and encouraging signs of a return of confidence, and growth to the economy.

The government had been hinting that after years of austerity some of the pain was about the be relieved, for example by tax cuts.

However that idea has been shot down by Germany’s Finance Minister Wolfgang Schaeuble. He has urged continued discipline and in any case has not ruled out a third bailout before 2022, when the troika creditors’ group – the European Union, International Monetary Fund and the European Central Bank – says Greek debt will be at a sustainable level.

The IMF, which agreed with Schaeuble about keeping the screws tight in Greece, along with the ECB and European Commission, are in effect running policy in Athens.

However politically if last week’s European elections are a fair barometer, sentiment in Greece has shifted from making sacrifices to saying enough is enough. Syriza, the left-wing winners of the European poll, argue for very different EU policies to combat the financial crisis.

“Schaeuble’s warnings and the IMF’s supporting continued caution might disturb the Greek government’s plans. Following defeat at the European elections, it planned to announce the end of austerity, starting by cutting tax burdens. There had also been rumours that the finance minister was to be replaced. That’s now on hold and fresh questions about when the Greek austerity programme could end are being raised,” says euronews’ Symela Touchtidou in Athens.

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