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As crisis ebbs, Tsipras promises doubters a 'new' Greece

Ersin Çelik
09:35 - 22/09/2017 Friday
Update: 09:36 - 22/09/2017 Friday
REUTERS
Greek Prime Minister Alexis Tsipras
Greek Prime Minister Alexis Tsipras

Tsipras would like to be remembered as the man who restored Greece's finances and ended international supervision of the economy. He wants the next creditors' review completed as early as December and to achieve "a clean bailout exit", without a standby credit line that would come in return for more reforms.

Athens made its first bond issue in three years in July and plans at least two more in the next seven months, aiming to fund itself by market borrowing in place of bailout money next year.

His conservative predecessor had a similar exit strategy as long ago as 2014 and seemed on course to achieve it. Instead Tsipras beat him and presided over the chaotic summer of 2015, when banks were closed for weeks as the financial system came close to collapse.

Tsipras has much political ground to recover. Support for Syriza has crumbled from around 35 percent in 2015 to 16 percent now, leaving it at least six percentage points behind the conservative New Democracy party, which has promised tax cuts.

A lot can go wrong as Tsipras tries to turn the political and economic tide. Time may be as much his enemy as his friend. The bailout reviews could derail or drag on for months, leading to renewed crisis. The second such review lasted half a year, and the delays hurt economic activity.

For their part, the lenders worry Greece may backtrack on agreed reforms, which would delay the conclusion of the review . Labour reforms that parliament passed during the summer lull were viewed by lenders as backtracking on promises.

"The gap between Tsipras's actions and his words, the shortcoming in his actions, that's what may trap him," a person close to the lenders told Reuters, warning that Greece may not manage to regain full market access and conclude the reviews.

After two years' experience of power, the government still struggles to deal with some practical problems. It has been trying for 10 days to contain an oil spill from a tanker which polluted popular beaches near Athens, angering residents.

Tsipras has been on a charm offensive, ranging from pep talks at ministries to photo opportunities with investors and young entrepreneurs and trips across the country.

Still, the lenders remain cautious. "We fully understand the government's desire for a clean exit," the European Central Bank's mission chief in Greece, Francesco Drudi, said.

But he told Proto Thema newspaper: "This will require a lot of effort to convince markets, investors and depositors that the momentum for reform will not abate and that no reversal of actions taken during the programme will occur."

#Alexis Tsipras
#Greece
7 years ago