Thursday, June 14, 2012

EU plans incentives for new Greek leaders

Financial Times
June 14, 2012

European officials are preparing to dangle a package of incentives in front of a new Greek government to convince it to stick to the country’s current bailout deal after Sunday’s high-stakes elections.

The package would include further reductions in interest rates and extended repayment periods for bailout loans, as well as EU money to spur investments in Greek public works programmes through the European Investment Bank.

The catch is that the sweetener is currently envisioned for a new government only if it is led by Antonis Samaras, head of the pro-bailout centre-right New Democracy party.

New Democracy is running neck and neck with the radical-left Syriza, which has vowed to scrap the current bailout memorandum.

“In the scenario where Samaras wins the elections, they would like to see him committing very clearly to his adherence to the memorandum,” said one EU official briefed on the discussions. “They would then get together with the new Greek government and say: here is what we can now do to make life a bit sweeter, a bit less harsh.”

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