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Troika ups pressure on Greece

March 29, 2012

Matthias Mors - head of the Troika of international lenders - believes 2012 will be a do or die year for debt-stricken Greece. Public acceptance of austerity measures is vital for progress, Mors has said.

https://p.dw.com/p/14UFx
Greek flags in front of the Akropolis
Image: dapd

In spite of a huge bailout package, the debt crisis in Greece still has the potential of "spinning out of control," Matthias Mors told German newspaper Süddeutsche Zeitung on Thursday.

The head of the so-called Troika group - comprising the EU Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) - said Athens had made "progress" and would stand a fair chance of "overcoming" the debt crisis.

But Mors said Greece was not yet "out of the woods."

"Those who believe that the crisis will automatically vanish after the second rescue package are fundamentally wrong," he said.

The European Union and the IMF have provided emergency funding for Greece, totaling 150 billion euros ($199 billion), in exchange for sweeping austerity measures aimed at reducing the country's mountain of debt.

Mors says more tough measures will be needed in 2012 and he believes this year will be "decisive" in determining whether or not Greece is "heading in the right direction."

Public support pivotal

Up coming elections in Greece have raised concerns about whether a future government will stick to the country's austerity and reform pledges.

Mors says success depends on "full implementation of all reforms" as well as on the Greek population, which needs to "accept sacrifices" at least in the medium term.

"Greece will need to earn more money than it spends for many years to be able to pay back the bailout loans," he told the Süddeutsche Zeitung.

Mors has also echoed concerns expressed earlier this week by the ECB's representative, Jörg Asmussen.

Stressing that there is "no security" that the bailout will work, Asmussen had said that "it will only be possible if there is clear ownership of the program across the political spectrum."

Asmussen made his comments on Tuesday as part of a Troika delegation, briefing EU lawmakers in Brussels on progress in Greece.

The group concluded that the current pace of reforms was "far from sufficient" to make public finances in Greece sustainable, or to "close the gap" in terms of competitiveness.

uhe/za (dapd, Reuters, AFP, dpa)