Euro zone downplays Greece vote dangers


The eurozone’s top finance officials have downplayed the risk of surprises after the September 20 Greece election, setting their sights instead on fraught bailout talks ahead, including restructuring Greek debt.
The EU’s economics affairs commissioner Pierre Moscovici said he felt “no worries” over the outcome of the vote, in which the radical leftists of ex-premier Alexis Tsipras are polling fractionally ahead of the conservatives of New Democracy.
“I have the impression, including when I see the polls, that there is a clear majority in Greece for parties that backed the (bailout),” Moscovici said at talks with European finance ministers in Luxembourg.
Greeks go to the polls for their fifth time in six years next weekend as Tsipras seeks a fresh mandate to push through huge reform commitments made under the new 86-billion-euro ($96-billion) bailout.
Austrian Finance Minister Hans Joerg Schelling said he was “totally convinced” that Greece would do what was agreed, after the elections.
“I expect it and I insist on it,” he said.
According to a latest poll, Tsipras’ Syriza party has won a narrow lead over the conservative rivals.
Both parties support Greece’s third bailout since 2010 that was agreed after six months of angry negotiations that nearly caused the eurozone to break apart.
“I don’t know what party will win, which coalition will be formed,” Moscovici said, with polls showing both parties short of winning an absolute majority.
Tsipras triggered the early poll with his August 20 resignation when his party split over austerity measures forced by the three-year bailout. Jeroen Dijsselbloem, the tough-minded head of the Eurogroup of eurozone finance ministers, urged Greek authorities to not waste any time, despite the vote.
“I think that it’s important that in Greece the preparations continue while the political situation is of course unclear at the moment,” said Dijsselbloem, who is also Dutch finance minister.
“The work needs to continue as much as possible and the same would go for the institutions,” he said.
The European Commission oversees Greece’s third bailout along with the ECB and the eurozone’s ESM bailout fund.
At the insistence of powerful Germany, the hard-line International Monetary Fund is expected to join the program after the first review, set for October.
But the IMF insists the eurozone reduce Greece’s level of public debt, which stands at a towering 190 percent of gross domestic product.
European sources said that everyone involved was pushing to move quickly on the first review, in order to get the IMF on board.
But this would then bring tense negotiations on how to scale back the debt, with eurozone nations insisting this be done only by extending maturities.
“The debt restructuring debate will be intense in October and November, assuming all goes well with the first review,” an EU source said.


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