Greece cannot afford policy reversal after bailout ends, says EU’s Costello

Greece is on course to complete its third international bailout program but cannot afford to backtrack on adopted reforms after its expiration in August, the European Commission’s mission chief to Greece said on Thursday.

Since its debt crisis broke out eight years ago, the country has received 260 billion euros in bailout loans from the European Union and the International Monetary Fund in exchange for austerity and reforms prescribed by its lenders.

The leftist-led government now hopes to reach a deal with its European lenders on further debt relief and on the terms of its bailout exit. Its term expires next year.

“Greece must ensure that reforms are on track, … and must avoid policy reversal after the program ends,” Declan Costello, one of the lenders’ representatives who supervise the bailout implementation, said during a conference in Athens.

Greece returned to growth last year and aims at making a full economic recovery in the coming years.

But Costello warned Greece not to get carried away by the positive signs. “It should not be interpreted that all problems have been solved. The structural underlying problems need to continue to be addressed,” he said.

“So, enjoy the growth bounce but don’t misinterpret it.” [Reuters]