Economic analyst Mohamed El-Erian says European leaders should view Alexis Tsipras' re-election as prime minister as an opportunity and should move forward with the much discussed debt relief, as the SYRIZA leader's strong,renewed mandate may make him the man best able to complete the structural reforms that he once vehemently opposed.
The chief economic adviser at Allianz SE and the chairman of Barack Obama's Global Development Council, El-Erian writes in an analysis for Bloomberg entitled "Greek elections are an opportunity for Europe" that Tsipras won a major victory despite "his astonishing 180 on the principal promise of his previous campaign -- that he would put an end to euro zone-imposed austerity -- which led to important defections from his party".
El-Erian suggests that Tsipras' about face may make him the man to implement the third bailout memorandum and that his conversion could place him among the leaders who were able successfully to implement reforms that they once opposed.
In this context he mentions the reforms of Brazilian president Luis Inacio Lula da Silva, whose political programme was antithetical to his previous agenda as a trade unionist, and the Mid-East peace deal signed by conservative hawk Menachem Begin of Israel.
El-Erian calls on Greece's creditors to proceed with debt restructuring, so as to strengthen Tsipras' position in pursuing reforms.
"Europe can strengthen Tspiras' hand by delivering further and consequential debt relief, which it has repeatedly withheld and that most, including the International Monetary Fund, believe is needed for a sustainable Greek recovery," El-Erian writes.
The analysts says that the fact that Greece as an EU front-line state is besieged by floods of refugees can be the perfect excuse for Berlin to discuss a restructuring it has adamantly opposed for years.
El-Erian says debt relief would boost the new government's hand in pursuing reforms and would open the way for much needed private investment.
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