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Analyst: Greece needs reform, not more austerity

brussels bureau

Analyst: Greece needs reform, not more austerity


The Greek parliament passed a second set of reforms early on Thursday morning (July 23), opening the way for further bailout negotiations to begin.

euronews’ Sándor Zsiros spoke to analyst Andre Sapir to find out more.

Sándor Zsiros, euronews:
André Sapir, welcome to euronews. The Greek parliament has approved some of the reforms. What does it mean for Europe?

André Sapir, Bruegel Institute:
Together with the approval last week of the other parts of the reforms, it means that the negotiations with the Greek government and the creditor countries can start and hopefully finish by the of August.

SZ: The most painful measures are still ahead. Will Mr.Tsipras have majority for these as well?

AS: Well, we will see what the negotiations will entail. And indeed, Greece and also some of the creditor countries will have to go back to parliament in early September. I am hoping that it will be a balanced agreement. We will see what the creditors demand in terms of austerity measures, but also what they really put on the table in terms of help for growth. And also, at some stage, some discussions about lightening the debt burden on Greece.

SZ: It’s clear that the Greek people and the government don’t want this reform package. Do you think it could still work?

AS: It’s true that the prime minister himself has said in parliament repeatedly that he does not believe in the package. I think the package can be a good package – there are measures there that Greece needs to implement if it wants to be a member of the euro-area. I think there is no doubt about that.

There needs to be reform on the working of the government; there need to be reform of the taxation system; there needs to be reform of the pension system. But what Greece does not need at this stage is more austerity measures.

So what will need to be found in the package – and it will be hard – is how to do those reforms progressively over time, but not make the growth situation in Greece worse. If the result of the package is that, than I think it will not go through the parliament and I think it would be bad for Greece.

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