ATHENS – Talks with Eurozone officials and German Chancellor Angela Merkel behind him, Greek Prime Minister Alexis Tsipras now turns to trying to persuade lawmakers in his Radical Left SYRIZA party to support reneging on campaign promises to get critical cash to keep the economy going.
Tsipras and SYRIZA were elected in the Jan. 25 snap elections on promises to reverse austerity and get debt relief from international lenders, but the reality of governing – Greece is running out of cash fast and needs the loans – has forced him to backtrack.
That has set off some dissent within SYRIZA, a motley collection of Communists, Anarchists, Maoists, Stalinists, Trotyskites, ecologists and a range of leftist ideologies who would be forced to eat their words of opposition to the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that put up 240 billion euros ($272.5 billion) in two bailouts but demanded big pay cuts, tax hikes, slashed pensions and worker firings.
Greece on Feb. 20 got a four-month extension to the bailouts, which Tsipras said he didn’t want at first, but has done almost nothing since them to prepare a list of reforms acceptable to the troika which the government can use to meet fiscal targets at the same time he continues to insist he will not impose harsh measures he calls recessionary.
The Finance Ministry said it will have a more specific list ready by March 30 or soon thereafter as the state coffers dwindle and banks are seeing a fast flight of deposits, more than 20 billion euros in the past few months, with depositors nervous the country will be forced out of the Eurozone yet.
Tsipras is walking a tight rope between trying to satisfy the lenders with more reforms while convincing his lawmakers and voters to go along with him even if it means renouncing his campaign promises – as his defeated rivals, the New Democracy Conservatives and PASOK Socialists predicted he would.
WE TOLD YOU SO
Tsipras had delicate talks with Merkel, whose country is putting up much of the bailout monies and is the toughest taskmaster for austerity, and who has said Greece won’t get any more aid until he relents completely and administers reforms he vowed to reject.
It’s a bitter pill for Tsipras and SYRIZA but the math is against him as he tries to meet his goals of restoring pay and pensions and cut taxes, rehire workers and stop privatizations, all of which he now will likely have to set aside and go along with the troika, as two two previous governments before him.
Tsipras reportedly will try to jawbone the 149 SYRIZA lawmakers himself while his coalition partner, Independent Greeks (ANEL) leader Panos Kammenos will also have to renege on his austerity opposition and get his 13 Members of Parliament to support the government.
Greece has until the end of June to reach a new agreement with the lenders but can’t last that long without a pending 7.2-billion loan installment Tsipras said he would never take, and as he has to talk to the troika, which he said he never would.
The reform package is said to include keeping the hated ENFIA unified property tax that Tsipras campaigned against and which he said he would kill, although it reportedly has stages of payments to benefit those who are less well off.
Also set to be included are more reforms or austerity measures for labor and pensioners, which Tsipras said he would never do. He also will allow privatizations he vowed to halt although the government said it would seek to keep a controlling interest in state enterprises, a tough sell to investors.
Another area of contention is Value Added Tax (VAT) as the troika wants the government to end a 30 percent discount for the islands. Alternate Finance Minister Nadia Valavani told ANT1 TV that one option might be to adopt regular VAT rates on the most popular islands, such as Santorini and Myconos.
The government though has said something different previously and is said to be looking at adopting a flat 15 percent VAT, which means some goods will become cheaper and others more expensive, but with possible exceptions for some basic items such as medicines.Source: The National Herald