Technical experts from the ECB, the International Monetary Fund and the European Commission are due to begin negotiations with their Greek counterparts by Tuesday on the long list of policies that the country needs to implement over the next three years, in return for emergency loans of as much as 86 billion euros ($94 billion).
The government said on Saturday that the heads of Greece mission from each of the creditor institutions may arrive a few days later, citing unidentified technical reasons. A government official had told reporters on July 23 that the heads of mission would arrive in Athens on July 24.
According to an international official directly involved in Greece’s bailout program, the delay is for two reasons: the first is that the Greek government is seeking to confine the movements of Troika staff in Athens, and the second is that creditors haven’t yet reached a common position with Greece on whether additional prior actions will be required before the country is eligible for a new aid program.
While the government and the Commission have said Greece has fulfilled the conditions, following two votes in parliament in the past two weeks, some euro area member states are still pushing for additional measures, the official added, asking not to be identified as he isn’t authorized to speak publicly on the matter.
New Memorandum
The delay means that agreement between Greece and its creditors over the next two weeks on a full memorandum of understanding detailing dozens of savings measures and a structural economic overhaul is unlikely, the official said, adding that a new short-term bridge loan may be needed to avert default on the ECB payment next month.
After five years, two bailouts, and the deepest recession in more than half a century, the word “memorandum” has become a loaded term in the country’s political debate.
“I don’t back this government to agree new memorandums and implement them,” Syriza governing-party lawmaker Panagiotis Lafazanis said in an interview with Real newspaper on Sunday.
Lafazanis was replaced as energy minister after leading a revolt of more than quarter of Syriza’s lawmakers against the agreement struck between Prime Minister Alexis Tsipras and the country’s creditors earlier this month, which calls for a new memorandum to be signed.
‘Debt Colony’
Previous memorandums committing Greece to enforce reforms ranging from the rules of bank recapitalizations to evaluating the “impact of the changes in milk pasteurization and sale procedures,” have prompted dissenters to claim that Greece has turned into a “debt colony.”
Creditors argue that changes are necessary to stabilize Greece’s finances and set the country on course to sustainable growth. Opposition to memorandums catapulted the anti-austerity Syriza party to power in January.
After six months of brinkmanship which pushed the country to the verge of exit from the currency bloc and led to the shutdown of banks and the imposition of capital controls, Tsipras capitulated, citing the lack of alternatives.
Opposition Votes
Syriza’s political secretariat will meet Monday to discuss the party’s strategy after the government’s U-turn and its effective loss of a parliamentary majority following the mutiny of MPs from the so-called Left Platform faction.
The Platform, led by Lafazanis, will hold an anti-austerity event, also on Monday afternoon, to debate the results of a July 5 referendum, in which Greeks overwhelmingly voted against the terms offered by creditors. The event is titled “The No hasn’t been defeated.”
As Tsipras will have to rely on opposition votes in order to secure parliamentary approval of the new memorandum and any prior action needed to secure the disbursement of loan tranches, Greece is heading toward a “de facto grand coalition,” Roubini Global Economics analysts Brunello Rosa and Mert Yildiz wrote in a note to clients.
“While Syriza is still hanging on to power, the defection of the party’s left wing, offset by parliamentary support from pro-bailout parties like New Democracy, To Potami and PASOK, shows that Greece is headed in this direction,” they said.
bloomberg.com
No comments:
Post a Comment