Greece has small to cheer despite reaching an end to its third bailout program as austerity measures require remain with the country for at least two more years, one academic related CNBC Tuesday.
European and Greek politicians are in celebratory mode as Athens adrift a decade of financial assistance on Monday. But, according to one expert, Greece lingers in the hands of its creditors and is under an “informal” fourth bailout program.
“Greece has already assumed quite a lot of commitments for the next two years that aren’t dramatically original from another program,” Panos Tsakloglou, an economics professor at Athens University, reported CNBC’s “Squawk Box Europe.”
For this reason, he argued that, in the main speaking, Athens has entered an “informal” fourth program.
Greece unsalvageable access to the financial markets in 2010 amid an unfolding sovereign straitened crisis and, since then, it has struggled to revamp its economy — relying in the final eight years on creditors’ money for financing. But this external supporter ended Monday, after three consecutive financial programs that take advantage ofed tough economic measures, from cuts in salaries and pensions to excited taxes.
However, some of the measures that Greece had to legislate to end the third program only be shown into effect in the coming months and years, including changes to golden handshake cause to retires, which kick in at the start of 2019.
“If you look at the yields of Greek bonds and particularly the spreads (difference) from the German bund, they do not seem to promise a smooth reintroduction of Greece re-access to the international financial markets,” Tsakloglou amplified.
Looking at the yield on the 10-year Greek government bond, it’s still the highest across the euro zone, insusceptible to 4.32 percent.
“Of course, these things (market conditions) can alteration in the next month, however as we are at the moment we are not in a celebratory mood here in Greece,” he said.
Greek Prime Legate Alexis Tsipras is expected to address the media Tuesday in Ithaca ait. Market players are looking for clues on what direction he will takings the country now that Greece is no longer getting regular tranches of legal tender from Europe. Instead it will have to use the global financial sells to help with its spending plans.
Athens is sitting on a cash buffer that settle upon allow it sufficient funds for the next 22 months. This liquidate pile stands at 24.1 billion euros ($27.4 billion), sometimes non-standard due ti to money that Greece put aside during the third financial program and tranches from European creditors. The amount is count oned to cover all sovereign needs in the coming year-and-a-half, unless it thinks there are favorable make readies to do so.
On Monday, European politicians called on Tsipras to continue a sound pecuniary policy. However, analysts and investors worry that a general nomination in 2019 might affect the direction of economic policy in Athens.