Coalition leaders agree to bring forward bailout renegotiation

The leaders of the three parties that form Greece’s coalition government agreed Wednesday to speed up the process by which Athens will ask its lenders for changes to the bailout.

Sources told Kathimerini that there was agreement between Prime Minister Antonis Samaras, PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis. Rather than leave the issue of renegotiating the loan agreement, or memorandum, until September, the three leaders concurred that Greece had to adopt a more proactive stance. As a result, it is likely that Finance Minister Yannis Stournaras will be asked to bring up the issue at a Eurogroup meeting, which is due to take place towards the end of July.

However, the task of renegotiating the terms will not be left up just to Stournaras. Samaras, Venizelos and Kouvelis are likely to form the key negotiating team but officials at other levels will also be involved.

The meeting was called after PASOK leader Evangelos Venizelos appeared concerned that the government was giving the impression it was not making any effort to renegotiate the terms of Greece’s bailout, particularly after Finance Minister Yannis Stournaras’s appearance at the Eurogroup meeting in Brussels on Monday.

“It is very important that we convey to the Greek people that we will do all we can to improve the terms of the support program,” said Venizelos after the talks at Maximos Mansion.

“The starting point for the review is the extension of the fiscal adjustment period. We have to convince our partners that the recession is much deeper than the one forecast so we need to spread the fiscal adjustment over a longer period so it is easier on citizens and growth.”

Venizelos avoided praising Stournaras but made it clear that the finance minister and the three party leaders were in agreement over the way forward.

“Mr Stournaras has the ability and experience to implement government policy, exactly as the three leaders have agreed,” said the PASOK chief.

Venizelos added that the best way for Greece to regain its credibility was to by implementing structural reforms and privatizations but he added that Greece’s lenders would also have to provide assistance.

“We have to convince our partners that it is important to frontload the loan instalments so that we can improve liquidity in the market,” he said. “Without this, there can be no growth and no investment.”

Kouvelis also sought to emphasize that the parties had not abandoned their pre-election pledges to renegotiate the memorandum. He said they were “bound” by the common policy platform they agreed on after the June 17 vote.

“The government is trying to create the conditions for a renegotiation, so we can move away from the odious measures in the memorandum,” said Kouvelis. “We are looking for alternative measures as well as steps that could provide relief for society.”

Sources said Kouvelis agreed with Venizelos’s position that an extension should form the basis of any discussion about changing the bailout terms. “The renegotiation will happen, we are working on it but ill will be a long and painful process.” 

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