Wieser: Close monitoring after a clean exit from the program


Euro Working Group chief Thomas Wieser on Wednesday said he was in favor of a Greek exit from its bailout program without any form of credit line but under strict monitoring by the eurozone.

In an interview with the website, Wieser added that there is no political will for another program for Greece or any other country – even a precautionary one, and that the application of the measures agreed for 2019-20 depends on whether the International Monetary Fund’s negative forecasts for the Greek economy prove correct.

The Austrian official highlighted that, as the program ends next August, the Greek government will have to proceed with the necessary reforms so that it can stand on its own feet afterward.

He stressed he is in favor of a clean exit and not a credit line as few people in the eurozone understand the difference between a credit line and a new program. A clean exit, he said, will only be possible if Greece has managed by the end of the program to create a cushion that will cover the small funding needs of the country in the coming years. This can be achieved via high primary surpluses and bond issues, Wieser argued.

The fact that new measures have already been laid out for 2019-20 (i.e. after the end of the program) creates a different framework to what other countries exiting a bailout process had. There is also the monitoring framework that follows the completion of the program, as was the case for Spain, Ireland, Portugal and Cyprus, said Wieser, noting that Greece will enter a similar monitoring process up to the repayment of 75 percent of its debts. However, the degree of monitoring will be much more intense in the first few years than in countries such as Ireland, he warned.

On Greek debt sustainability, Wieser said that according to the Eurogroup decision from June 2016, only when the program is completed and it is deemed necessary will there be any decisions regarding the lightening of the debt. After all, he said, Greece already enjoys particularly favorable financing conditions.