A Greek sigh of relief should have been heard to the end of the world after Eurogroup’s approval of the country’s bailout program on Monday, which prevented a direct risk of default.

By Aggelos Stagos

There is  no precedent in world history of a country which has an estimated €107 billion of debt written off, is given the possibility of repaying the rest over a much longer period and, at the same time, is lent €130 billion more. Several world records!

All those critics of the program forget the huge sums of money involved, forget that European governments are accountable to their Parliaments and societies for them, they forget Greece’s bad name abroad and also forget the creditors’ very negative report on Greek debt and its viability.

It should not go amiss that Germany played a leading role in the prevalence of the political will over banks and speculators who were forced to take a “voluntary” haircut to their Greek bond holdings of more than 50%. Chancellor Angela Merkel has said for some time that it is inconceivable for governments to assume all the burdens in difficult times and for the private sector only to enjoy the profits. But this time, too, central banks made their contribution by forgoing the profits of the Greek bonds they possess.

The creditors have done their bit and we must now do ours. The ball is in Greece’s court and the path ahead remains rough. A huge amount of work remains to be done in minimal time: the bond swap deal must be complete in 45 days, Parliament has to approve various bills accompanying the program and the government must provide proof of its willingness to honor commitments by the next eurozone summit, early next month. Success is not at all certain.

As regards the strict supervision envisaged in the agreement, Greek sovereignty is indeed eroded, but this has been a fact since the first moment we reached the edge of the precipice. The obligation for a Constitutional provision giving priority to the repayment of creditors may have not been necessary but there will not be a need to activate it for a number of years.
Until then, developments are certain within the eurozone, a Eurobond may be issued and steps will certainly be taken towards economic and political integration. So, there is still hope…One things that remains to be seen is when Greece will be able to borrow in the open markets again –after the huge haircut they sustained.