Greece may have a four-month extension to work out a deal with international lenders, but in the view of many in the world media, it’s not going to work.
Crisis Still On, Greece Running On Empty
The impression of business as usual was illusory. The new government may have stepped back from the impending rift with its creditors, but its readiness to go so close to the edge has hurt the economy and brought the state close to bankruptcy.
Worse, there is scope for more damage to be done this spring, since nothing has been settled between the Greek government and the IMF, the European Central Bank (ECB) and the European Commission (the institutions that speak for Greece’s creditors). Fleshing out the thin list of reforms the government has presented so far is bound to be an agonising process.
The loss of deposits, which brought Greece alarmingly close to imposing capital controls, has undermined the banks. They have had to turn to the Greek central bank to tap “emergency liquidity assistance”.
Since such support is kept on the shortest-possible rein by the ECB in Frankfurt, this means that the banks are still acutely vulnerable. With their funding in disarray they are in no position to help businesses by making new loans, so the shortage of money at the banks is now affecting the wider economy.
This paralysis will not abate until a lasting deal with creditors is struck that rebuilds confidence in Greece’s long-term future within the euro area. Syriza’s climbdown in late February has bought time but it has not brought any money from Greece’s creditors.
None will be available until the government shows that it is sincere in its promise to complete the reforms that creditors still insist upon and that are supposed to steady both the economy and the public finances. On the campaign trail Syriza denounced many of them as intolerable.
But for Greece to resume its economic recovery a lot of things will have to go right. In particular, Mr Tsipras will have to break more election promises. Even if he climbs down completely, however, there is no way to undo the damage already done to the economy by the events of the past few months.
Is Greece Already Rolling Back Pledges
CNBC – Nefeli Agkyridou
It’s payback time for Greece. Despite securing a four-month lifeline on its loans, the bills are already piling up. On top of this month’s repayments to the International Monetary Fund worth a total of 1.5 billion euros, the country faces debt obligations amounting to 22.5 billion euros ($24.8 billion) for 2015 …
And there are mounting concerns that, in spite of the extension, Greece still won’t be able to pay its way …
State revenues, key to helping Greece repay its loans, dropped dramatically in January as people stopped paying taxes in the hope of new legislation. Banks, meanwhile, have been hit by a big wave of capital flight as depositors took money abroad in fear of a “Grexit” …
“It is absolutely clear from a market’s perspective that Greece will have to continue relying on official sector financing if it likes to stay in the euro.
The new government may try different ways to raise tax revenue etc. than previous governments, but investors have heard the same song over and again”, David Schnautz, Interest Rates Strategist for Commerzbank in New York told CNBC …
“Any social spending measures should be part of a new program that the government is supposed to negotiate until April. Otherwise, the government will lose credibility points that will cost during these negotiations. Moreover, introducing such measures now, will increase funding pressures even more in the months ahead”, Thanos Vamvakidis, Head of European G10 FX Strategy at Bofa Merrill Lynch told CNBC …
Greece Injured By EU
Counterpunch – Andre Vltchek
Greece is hurting. On the streets of Athens, people look melancholy, depressed, sad.
Weather keeps changing: it is raining, suddenly close to a freezing point, then sunny again. What does not change is misery on the streets of the capital: bundles and improvised beds of homeless people, beggars waving accusative banners and slogans, abandoned buildings taken over by squatters.
Athens in 2015 reminds me of Buenos Aires in 2002, or Moscow of 1998 …
In Greece, there is anger against the West, against capitalism and the Empire, but in many ways, Greece is still part of the West.
I spoke to dozens of people in Athens. Unlike in Istanbul, where young and educated people are monitoring with passion new developments in revolutionary Latin American countries, the references of most Greeks do not go further than Germany and France.
Greece is injured by Europe, but it is shockingly Eurocentric …
Like the rest of the continent, Greece is too Eurocentric and too unfamiliar with the rest of the non-Western world. Its media and its education system made it this way.
Greece is in a cage; it is a hostage. The door is actually open. But the country is scared to walk out and face the world. It still prefers to suffer from familiar tyrants, than to encounter the unknown.
Source: The National Herald