ATHENS – Despite rejecting more austerity demands by international lenders holding back money until he does, Greek Prime Minister Alexis Tsipras is facing mounting pressure from SYRIZA dissidents who want him to walk away from the bargaining table.
Greece is essentially broke, unable to borrow from the markets because of prohibitively high interest rates, without more aid from the troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) and seeing unrelenting flight of deposits from bank accounts, leaving the institutions teetering.
The troika won’t release a 7.2-billion euro ($7.9 billion) installment until Tsipras gives in on his campaign promises to reverse big pay cuts, tax hikes, slashed pensions and worker firings.
He agreed on Feb. 20 to a four-month bailout extension but his coalition, which includes the tiny Independent Greeks (ANEL) party, has done virtually nothing since to produce a credible set of reforms and has used the time to blame the lenders and international forces for the country’s financial problems.
Greece on June 5 missed a payment of 300 million euros ($333.46 million) due the IMG, choosing the bundling option to fold that into other payments to the institution, totaling 1.6 billion euros ($1.77 billion) on June 30 – if it has the money.
That coincides with the end of the bailout extension and Kathimerini said talk has surfaced in the government of asking for another extension – plus a partial loan injection to keep the country going – and then talk about troubled reforms in the fall, and a possible third bailout, all of which Tsipras vowed to reject before the January elections.
Greece has been surviving since 2010 on 240 billion euros ($266.76 billion) on two rescue packages from the troika but the money has done nothing to improve the economy which is still staggering under a debt of 337 billion euros ($374.5 billion) even though a previous government stiffed investors, including in the Diaspora, with 74 percent losses.
THE WEEK THAT IS
The coming week is critical for Tsipras, who now is being almost ignored by EU leaders even though he keeps imploring them for political backing as Greece stands alone against the other 18 countries in the Eurozone and 26 others in the political bloc, isolated by the government’s defiance.
While he’s digging in his heels after initially showing signs of compromise, Tsipras continues to insist that despite his unilateral rejection of the troika’s terms that his proposal – a secret whose details are being kept under wraps from the public – is so good that the lenders should accept it and release more money.
His government says almost every day that a deal is coming “any day now” while officials from the troika and EU say the two sides are far apart because Tsipras won’t administer more tough conditions, such as pension cuts and keeping worker right benefits under wraps.
The government has shown some signs of bending on some unspecified fiscal targets and changes in the Value Adde Tax (VAT) tax system but nothing else so far.
While he’s hanging tough, that’s not enough for the most radical elements in the Radical Left SYRIZA who want no deal with the troika and would prefer to have the country return to the drachma and failed Soviet-style economic models repudiated around the world.
The unrest has fueled speculation about the possibility of early elections even as Tsipras insists he wants a deal with creditors on his terms alone.
On June 6, key ministers played down the prospect of snap polls. “There is no reason for elections,” Health Minister Panayiotis Kouroublis said, adding that he “strongly believed” a deal would be reached despite no evidence it will.
Energy Minister Panayiotis Lafazanis, who heads SYRIZA’s radical Left Platform, also appeared to play down speculation and has openly defied Tsipras, refusing to go along with privatizations, said the government should stick to its guns and campaign promises and ignore the troika.
While irked by Greece’s stonewalling, EU leaders continue to try to find a solution, fearful that a Greek exit from the Eurozone could endanger the block and pass on the costs of a default to the taxpayers in the other 18 countries using the euro.
German Vice Chancellor Sigmar Gabriel warned that Greece had no further room for maneuver, another in a long line of ignored warnings that haven’t proved right yet.
Asked if he expected an agreement soon, Gabriel told German daily Stuttgarter Nachrichten: “That depends solely on the Greek government. Europe has gone up to its limits.”
He added that many in Germany – the biggest bailout contributor but which insisted on austerity – don’t care what happens to Greece anymore or if the country leaves the Eurozone.
“This would get very expensive for sure,” he said. Gabriel criticized Tsipras who, he claimed, is “not willing to tackle the issues that need to be solved. He’d rather put them onto the shoulders of the European taxpayers. But this won’t work.”
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