DIMITRIS KONTOGIANNIS

Greece is preparing to exit its bailout program on August 20 after three rounds of financial assistance in 2010, 2012 and 2015, exceeding 300 billion euros in total.

The latest opinion polls point to an uncertain election outcome on September 20, with SYRIZA and New Democracy being virtually tied in the first place at this point.

Greek government officials have highlighted the importance of debt relief and international creditors have stressed the significance of structural reforms in enhancing economic growth, while fiscal policy remains a controversial point. Political uncertainty and capital controls have clouded the outlook and pundits expect the economy to fall back into recession this year; some even expect it to shrink in 2016. In this context, the sooner the banking sector assumes its role and provides credit to the economy, the better.

The outcome of all deliberations between Athens and the creditors will be judged by the ability of the Greek economy to grow in coming years. A credible agreement could contribute to this extent.

It is important that the lenders recognize the influence of economic activity on budgetary policy and set the targets so as to avoid a painful, drawn-out adjustment process that leads to a debt trap.

Austerity and reform fatigue as well as several years of economic recession cast doubts on the success of the new bailout program to be agreed between Greece and its lenders in the coming weeks.

Greece is paying the price of a poor negotiation strategy, unrealistic expectations about economic and political reality in the European Union, the lack of progress in implementing reforms and the intransigence of some eurozone officials.