Europe yesterday put Greece on the ropes. At the risk of going today to default and exit the euro, with a playpen that has lasted two weeks and illiquid banks, members of Athens in the Eurozone rose up and forced the rescue conditions.
The Greek prime minister, Alexis Tsipras, trading at press time the strongest points of the document that had been prepared in the morning the finance ministers of the euro and Clarin consulted last night.
The deal is unprecedented in Europe. If Greece accepts and Tsipras at dawn does not kick the table, Athens will become a kind of European protectorate. The document, even in its wording, is a humiliation for the first country who dared to rebel against European economic orthodoxy imposed by Berlin since the beginning of the crisis.
Germany won all their weight supported by Finland, Slovakia and the Baltic republics-some sources include Spain in this group. France and Italy tried to soften the most radical measures, but had little support from Luxembourg, Austria and Cyprus.
If Athens met, the scenario that opens is a race at full speed against almost insurmountable obstacles. Wednesday before the Greek Parliament must approve a list of “priority actions” increases in VAT and cuts in pensions. If you do, the finance ministers of the euro would meet again, probably on Wednesday to ask the European Commission to prepare the rescue.
While negotiating, the ECB will maintain the minimum liquidity necessary Greek banks without enable lifting the yard.
From there came the harsher measures. It is a long list of reforms to liberalize the economy, privatize ports, airports and even the latest Greek red line, the national electricity company. There will be a labor reform that would leave the unions almost powerless, limited strikes and facilitate collective redundancies.
You should also expedite the evictions, which will increase the number of Greek homeless.
Athens would also have to accept the creation of a so-called “privatization fund” with registered office in Luxembourg that would be controlled by the creditors and which he would have to put assets worth up to 50,000 million euros, equivalent to 27% of the state economy. The idea, 100% German, serve to gradually reduce debt by selling those assets. This fund would be theoretically ploy that would make debt sustainable and allow the IMF to continue to participate.
In addition, Greece would lose absolutely their fiscal sovereignty. Creditors would have to give its approval to any legislative changes to make the Greek executive and that have an economic effect. Tsipras must also commit to implementing automatic spending cuts if it deviates from the objectives of fiscal surplus, which in 2018 will not be less than 3.5% of GDP.
The documents say rescue would be between 82,000 and 86,000 million euros, of which 8,000 to 12,000 would come from Greek privatization and fiscal surplus. The IMF would at least 16,000 million. And Greek banks could take in up to 25,000 million recapitalization.
Athens also fails and debt restructuring. The only reference would be a promise to restructure after the first revision of rescue, never before the end of this year and never to take off, only through the postponement of maturities. And as long as Athens apply all settings and prescribed reforms.
Tsipras had emphasized the need for the restructuring of debts, totaling 320,000 million euros (180% of Greek) GDP. Few economists believe that debt reaches paid by completo.El International Monetary Fund said last week that Athens needs a haircut of 30% of its debt.
Germany tried until late at the end of the document include a reference that first time I had written down the threat of expulsion from the Greek euro.
Literally: “It would offer fast negotiations for a temporary exit from the Eurozone.” Didiplomáticas sources told the press time that such a reference would have been dropped from the final version of the text.
The same sources accused Greece of having done everything possible to lose the trust of their partners, but the written agreement and both seem a form of grueling agreement as an attempt to put the brink Tsipras that Parliament reject the measures and Europeans to expel several countries like Greece without taking buscan- the decision directly. The German weekly Der Spiegel said yesterday that the agreement is “a catalog of cruelty”.
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