PARIS (MNI) – The doubled-barreled bailout and debt-reduction deal
reached at the Eurogroup meeting early Tuesday morning “could be the
beginning of a new world for Greece, where the pending financing
problems have been addressed,” European Central Bank President Mario
Draghi said in an interview published Thursday on the website of the
Wall Street Journal.

But for that to happen, he added, Greece must now enact all the
deficit-cutting measures and longer-term reforms it has promised.

“The Greek government has undertaken very serious commitments in
the fiscal policy and in the structural policy areas,” he noted. “But
there are implementation risks and probably upcoming elections. The
Eurogroup gave reasonable probabilities to the success of the program if
the measures, especially the structural measures, were undertaken.”

Despite the ongoing social tension and sometimes violent
confrontations in the streets of Athens, Draghi seemed sanguine about
the willingness of most Greeks to accept the economic pain caused by the
austerity measures being imposed on top of an already deep recession.

“The number of people who favor default, inflation or even an exit
from the euro doesn’t seem to be prevalent in Greece,” he said.

The ECB chief also downplayed the notion, clearly a concern in
financial markets, that Portugal could follow in Greece’s footsteps.
Asked if he thought the government in Lisbon would need another
bailout, Draghi replied: “No. We consider the program on track.”

Asked whether Portugal might benefit from restructuring its debt,
as Greece has just negotiated with its creditors, Draghi once again
sought to discourage the idea. “We have confidence that the program
countries are taking appropriate actions and that the targets of their
programs are achievable and realistic,” he replied.

But he was not prepared to say the Eurozone debt crisis has been
resolved. “It’s hard to say if the crisis is over,” he said.

On one hand, there have been a number of “positive changes” in
recent months, he noted, including greater financial market stability,
more resolute deficit-cutting and reform agendas by Eurozone
governments, the new “fiscal compact” to reinforce fiscal surveillance
and enforcement, a less fragile banking a system, and a growing
recognition by governments of the need to relinquish some of their
national sovereignty for the greater good of the union.

On the other hand, the Eurozone economic recovery “is proceeding
very slowly and remains subject to downside risks,” Draghi cautioned.

“I was surprised too that there was no elation after the approval
of the [Greek] package, and this probably means that markets want to see
the implementation of the policy measures,” he added.

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–Paris newsroom, +331-42-71-55-40; bwolfson@marketnews.com

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