Brussels too optimistic over recovery

"The troika's 10 mistakes and the 3+1 contradictions of the European Commission in designing the bailout," headlines the Sunday edition of Greek daily Eleftherotypia. The article is meant to respond to the barbed criticism by international creditors regarding delays in the implementation of reforms to Greece's economy demanded in exchange for providing financial aid.

Among the "mistakes" committed by the troika of the European Central Bank, the European Union and the International Monetary Fund, the paper reports they –

favoured the bailout, not of Greek banks, but of French and German ones; [...] relied on the discredited political class and rejected the new emerging political force, Syriza; [...] put the cart before the horse (austerity without reform); and underestimated the depth of the recession, which caused wage misery and the destruction of the middle class – the spinal cord of social cohesion in Greece – [and] recapitalised the banks without requiring them to clean up their balance sheets.

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As for the Commission's "contradictions" Eleftherotypia notes in particular that in a recent report on economic forecasts for 2014, Brussels mentions a "significant improvement in the country's economic climate". Yet, says the paper, the presumed optimism of the Greeks is not sufficient to kick-start the economy, and adds that

the index of confidence in the economy fell in June and July, [bank] deposits are not rising while the stock market is attempting to rally after a sharp decline in May-June and is now at the same level as at the beginning of the year, meanwhile the rate for 10-year Treasury bonds remains at about 10 per cent.

In conclusion, says Eleftherotypia, to consider the rise in May tourism income as a springboard for recovery is a way of ignoring the reality that the remainder of the economy that is suffering from austerity measures. In fact, stresses, the paper,

the Greek bailout only works if the whole of Europe is reformed.