Alexis Tsipras Is Wearing a Tie Again, but Is Greece’s Debt Crisis Really Over?

Alexis Tsipras Is Wearing a Tie Again, but Is Greece’s Debt Crisis Really Over?
Greek Prime Minister Alexis Tsipras holds a tie at the end of a speech to lawmakers from his left-led governing coalition, Athens, Greece, June 22, 2018 (AP photo by Petros Giannakouris).

On June 22, Greece reached an agreement with its eurozone partners to formally exit from the latest of a series of bailout programs that have provided an economic lifeline to Athens throughout its debt crisis, but at the cost of eight years of brutal austerity. To celebrate the deal, Greek Prime Minister Alexis Tsipras finally donned a tie, something he had pledged in 2015 not to do unless Greece was granted debt relief. In an email interview, Angelos Chryssogelos—a teaching fellow in politics at the Department of European and International Studies, King’s College London, and associate fellow of the Europe Program of Chatham House—and Angelos Angelou, a doctoral candidate at the European Institute of the London School of Economics, discuss the terms of latest deal and its implications for Greece’s budgetary priorities and politics.

World Politics Review: What does the latest deal between Greece and its EU partners change in terms of Greece’s public debt and budgetary constraints? What remains unchanged, and what has been left unresolved for later?

Angelos Angelou and Angelos Chryssogelos: The recent agreement by eurozone finance ministers “reprofiled” Greek debt by extending the maturity dates on a number of loans by 10 years. Eurozone countries also undertook two commitments to be fulfilled by 2022: to abolish the stepped-up interest rate related to the debt buy-back tranche of the second Greek bailout program; and to transfer to Greece all related profits from the European Central Bank’s Security Market Program and Agreement on Net Financial Assets, which allowed the ECB and the Bank of Greece to purchase Greek sovereign bonds. In addition, Greece will also obtain the last tranche of its loan under the European Stability Mechanism, amounting to 15 billion euros. Of that, 5.5 billion euros will be used for debt-servicing, and 9.5 billion as a cash buffer. This brings Greece’s cash buffer up to a total of 24.1 billion euros, covering the government’s fiscal needs for the next 22 months.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.