Athens: A euro zone bailout deal set up last month to slash Greece’s huge debt by nearly a third is “probably the last chance” to reconstruct the country’s economy, the Greek central bank said on Wednesday.
“The new opportunity given to Greece is probably the last,” the Bank said in an interim report on monetary policy delivered to parliament, adding: “New delays or slippage from targets must be avoided in every way possible.”
Euro zone leaders in late October set up a rescue plan to provide Athens with €100 billion ($135 billion) in loans and €30 billion to re-capitalize its banks, coupled with a scheme for private lenders to write off 50% of Greek debt.
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But the latest bailout, in addition to the timely release of pending loans from an EU-IMF package set up in 2010, have been held up by reform delays which the Bank castigated on Wednesday.
“Thus far, the pace and degree of policy implementation have failed to convince both the markets and the general public that Greece is on the road to achieving the goals set,” the central bank said.
“This ‘credibility deficit´ has its roots mainly in the fact that economic policy has often been conducted in a piecemeal manner, indecisively, with backtracking and delays, and following rather than leading developments,” it noted.
A new unity government under former European Central Bank deputy chief Lucas Papademos was set up in a power-sharing deal between three Greek parties earlier this month to ratify the euro zone deal.
Greece needs an € eight-billion ($11-billion) pay-out by 15 December to avoid bankruptcy but the conservative group in the three-party unity government has now refused to sign a reform pledge the EU says is needed for the funds.