Regling: Debt relief measures interrupted if Athens retreats on agreed-to reforms

European creditors took less than a day to react to the leftist-rightist coalition government in Athens, following a more-or-less package of future tax breaks and spending measures unveiled by Greek PM Alexis Tsipras over the weekend - with the latter mostly eyeing next year's general election.

ESM Managing Director Klaus Regling was joined by EU Commission spokesman Margaritis Schinas on Monday in reiterating that agreed-to reforms must be implemented by Tsipras’ government.

Regling, in a more ominous tone that what the Greek side has been used to hearing from him, warned that debt relief measures extended by European creditos will not be implemented if reforms are rolled back or not pushed through by Athens.
He insisted that there was no turning back on reforms, and that Athens must meet its commitments.

Tsipras and a bevy of top ministers, from Euro-left moderates to hard leftists, have repeatedly left open the prospect of “persuading” creditors that another round of social security cuts – set for January 2019 – is unnecessary, given that Athens is over-performing in terms of meeting fiscal targets.

“We’re patient creditors, but we can interrupt debt relief measures that we’ve extended to Greece, if the reform program is not continued as agreed to,” he warned.

At the same time, he said recent contacts with Tsipras cause him to be “optimistic”.

In Brussels, Schinas echoed the influential ESM chief, saying the fulfillment of commitments undertaken by Athens is binding.

In directly touching on the pension cuts issue, he said the draft 2019 Greek state budget must first be scrutinized by the Commission’s services before any margins for flexibility are ascertained.

Finally, he reminded that Tsipras will be in Strasbourg on Tuesday for a European Parliament plenary session.