With the agreement on a third bailout, Greece out of a zone of extreme financial turmoil, but comes in a hard phase of cuts deeply dividing the party of Prime Minister Alexis Tsipras.
Alexis Tsipras Prime Minister of Greece. Photo: Reuters
ATHENS With the agreement on a third bailout, Greece out of a zone of extreme financial turmoil, but it comes in a hard phase cuts deeply dividing the party of Prime Minister Alexis Tsipras.
The Greek finance minister, Euclid Tsakalotos, had an unpublished words on Friday by the Greek government, considering that the new aid plan approved by their counterparts in the euro area offered “many opportunities” to the country.
While Tsipras kept saying he did not believe in the agreement signed, the team leader of the Greek negotiators decided to see the glass half full. “The agreement advances to Greece because becomes more stable financial system from now,” said Tsakalotos.
The minister even said that the new budget cuts and the measures required in return for financial support provided ” the opportunity to transform the public sector, fight corruption, tax evasion “and take” many important structural reforms “.
Greece desperately needed a new loan of 86,000 million euros -95.000 million dollars for the next three years. State coffers are empty and the country does not have the money to repay loans received since 2010. Athens will return 3,400 million euros to the European Central Bank (ECB) on Thursday.
The agreement ” it is essential to clear the uncertainty weighing on Greece for six months and to restore confidence, “said Commission Vice President in charge of the euro, Valdis Dombrovskis.
Several national parliaments, including the German Bundestag, must now approve the agreement before Greece receives part of the promised loan.
The first tranche of the aid is 26,000 million euros, an “immediate” payment of 10,000 million to recapitalize Greek banks, decided the Eurogroup on Friday.
The second “subsection” of 16,000 million euros, will begin with a payment of 13,000 million by August 20, and will be followed by others in autumn (boreal) function the implementation of reforms, the Eurogroup said in a statement.
The electoral calendar puzzle
The focus of creditors (EU, ECB and European Stability Mechanism Fund International Monetary) will now focus on the implementation of the reform program
The pace is frantic. The liberal daily Kathimerini on Saturday listed about 40 measures in taxation, labor law, competition, social security and pensions, which should enter into force before the end of the year.
With the previous two loans (2010 and 2012), “creditors learned that if they do not depend payments” respect for reforms, “Greek governments do not apply,” wrote Nikos Kontantaras Saturday, columnist for Kathimerini.
The implementation of the program also depends on the support that has Tsipras. The aid plan sparked strong divisions within Syriza, the radical left party of Prime Minister and Friday had to be approved by 120 votes for the opposition and right sovereignist party ally in power.
According to the press, Tsipras and told them to its European partners that will have to call early elections in the autumn, although it will be difficult to find a date.
A poll in late September could harm the Eurosceptic dissent that emerges within Syriza, still poorly organized, but could delay reforms.
If held in late October, the government could have a positive first assessment of the creditors and even with a commitment to a debt restructuring, but Tsipras also run the risk of losing popularity.
A reduction of the Greek debt to a “sustainable” level is one of the essential conditions of participation IMF rescue.
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