Eurogroup agreement a chance for Greece to turn the corner, says Tsakalotos

Finance Minister Euclid Tsakalotos believes an agreement between the country’s lenders at Tuesday’s Eurogroup may mark the start of a recovery for the Greek economy.

Tsakalotos emerged from the lengthy discussions in Brussels early on Wednesday to declare himself satisfied with the deal.

“After a few tense moments and 11 hours of discussion, we’ve reached an agreement that means the first review has come to a close and that there is substantial agreement on nearly all aspects of that,” he said.

Greece’s creditors agreed to release 10.3 billion euros over the next few months, which was in line with what Athens had been expecting.

“We were hoping for something between 9 and 11 billion,” said Tsakalotos. “Quite a bit of that is going to be for arrears… so that will mitigate in quite a large extent some of the recessionary impact of the measures we have taken.

The agreement was less definitive on the issue of debt relief for Greece but Tsakalotos said there were still positives to take from what the Eurogroup had agreed.

He noted that the European Stability Mechanism will immediate be able to begin looking at short-term debt relief measures for Greece.

“There is [also] and agreement that there will be medium-term measures that will be specified in 2018 but we already have the contours of what these measures will look like,” he said.

“There is also an agreement on the longer-term debt,” he added. “It is an important moment for Greece after so much time.”

The Greek finance minister suggested that the package agreed in Brussels would be enough to trigger investment in the Greek economy and an ensuing recovery.

“There is some ground for optimism that this can be the beginning of turning Greece’s vicious cycle of recession-measures-recession into one where investors have a clear runway to invest in Greece and turn the corner in favour of the virtuous cycle,” he said.