A very difficult situation

Posted by Kyra Adam 30/01/2017 0 Comment(s) Economia Blog,

The European creditors and the IMF presented a common proposal-ultimatum to the Greek Government in order to close by the end of February the present bailout review. Putting aside their differences over the sustainability of the Greek debt, the creditors are now following the same tune, pressing Tsipras’ government to close the second revue, which, according to the timetable set in the 2015 Third Bailout Programme ,should have been closed a year ago.


The present “deal” between creditors was apparently closed at the Forum of Davos between Mrs Lagarde and Mr Shcaueble.


According to a top European official, the agreement has to be reached by February 20, during the last Eurogroup of the month, because that is the last date with “no political significant election in relevant member states.”


The creditors force the Greek government to legislate, as soon as possible, additional, permanent austerity measures which will be implemented after 2018, (when the present bailout programme ends), in order to keep intact the surplus of 3.5% primary budget surplus for the years to come. These additional measures are required by the IMF as a condition to remain to the Greek programme, because it estimates that the budget targets already set will not be met and consequently the Geek debt will remain unsustainable. The IMF cannot participate in programmes in countries with unsustainable debts.


The Greek government, despite many ambiguous statements of several top officials, seems ready to accept these hard measures of additional 4.5 billion euros, but strongly denies the legislation procedure. PM Tsipras in a recent interview stressed that “under no circumstances we will have legislation on any further austerity measures”.


Opposition parties, namely New Democracy under the new leader K. Mitsotakis clearly denied any help to the government to pass the Bill in the Parliament by a majority of 180 votes, stressing that the government herself has to find a solution to the crisis she caused. He proposed again that the only solution is  the early elections. Mr Mitsotakis is going to meet in Berlin with Mrs Merkel in the near future, but it is yet unclear if he will be able to present an alternative proposal which will satisfy the creditors and reassure the Greek voters that they will not pay more for nothing.


Rumors spread during the week end insist that in Brussels there is an attempt going on to overcome the impasse, but it is too early for confirmation.

Leave a Comment