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Greece IW News 13. July 2015

Five lost months: three gained years

The difficult talks on a further bail-out package for Greece seem to have come to an agreement: the impending Grexit finally became an agreekment. At least for the three coming years, Greece will stay in the Eurozone.

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A compromise was worked out based on the reform program submitted by the Greek government last Friday. It became apparent that president Tsipras and his government also acknowledge cleaning up the state budget and strengthening competitiveness to constitute the crisis policy’s key principles. Ultimately, Greece has to be held responsible for the escalation of the current crisis at the last-minute summits during the past weeks. The Greek negotiators left five months idle that could have been used for a more constructive result.

The discussed three-year-reform package amounts to 86 billion Euro with first reforms to be implemented by the upcoming Wednesday. This is necessary in order to rebuild the trust that the Greek government gambled away during the past months. One of the program’s key points is the constitution of a trust fund aiming at an acceleration of the state asset’s privatization. The major advantage of such a fund is that revenues do not fall flat in the state budget but are channeled precisely for the bank’s recapitalization and investments.

This compromise is reasonable and contains a specifically defined framework for the coming years. In addition, it represents a more practical alternative than the proposed temporary Grexit. In order for the conflict not to erupt again unnecessarily, both sides of the European community must revert to treating each other with respect.

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