Greece should not lose time trying to renegotiate its international bailout, but focus instead on getting its reform program on track, European Central Bank (ECB) policymaker Joerg Asmussen said, adding that it was risky to delay adjustments.
Greece’s incoming coalition government under conservative Greek Prime Minister Antonis Samaras has said it wants to soften the terms of the bailout, mainly by extending it by two years, to enable the country to recover from a five-year-long recession.
“The first priority for the new Greek government has to be getting the program back on track,” Asmussen, an ECB executive board member, said in a speech yesterday, adding that policy implementation had virtually stalled over the past three months.
“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,” Asmussen told a conference in Athens organized by The Economist magazine.
Asmussen, who has become an international negotiator for the ECB since joining the bank at the start of the year, had told a Greek newspaper at the weekend that Greece’s international lenders were willing to rework some of the program’s conditions, but not drastically.
It was key for all countries receiving financial support — Ireland, Portugal, Spain, Cyprus — to implement their programs rigorously to win back investors’ trust, Asmussen said.
“There is no silver bullet,” Asmussen said. “Those who advocate ‘once and for all solutions’ — be that a banking license for the ESM, a European transfer system, or the like — are contenting themselves with a superficial analysis.”
Asmussen spoke just ahead of a visit by auditors from the EU, IMF and ECB who will review Greece’s implementation of the reform program.
The visit of the “troika” of creditor auditors, expected to begin today though precise information is scarce, comes only days after a critical EU summit, where European leaders gave the green light for troubled banks in Spain to be recapitalized directly from the eurozone’s 500 billion euro (US$623 billion) bailout fund.