Last April it was clear that European Union Council President Donald Tusk had good reasons to sound skeptical, arguing the finance ministers should make more progress before the leaders intervene for Greece.
Greece’s lenders, especially the IMF, want the Greek parliament to adopt a €3.6 billion package of austerity measures that would be implemented only if Greece missed its primary surplus target for 2018, set at 3.5 percent of GDP by the bailout memorandum signed last year.
Already for months now Greece and its creditors — its European partners and the International Monetary Fund — have been struggling to agree on the reforms and cutbacks the country must agree to as part of its ongoing bailout program.
Yesterday again many Greeks were on the streets to let their voice sound for the deaf ears of their parliament.
Having opened a two-day debate on tough new pension and tax measures demanded by bailout creditors amid a wave of unannounced strikes that shut down local media outlets, public transport and ferries to the Aegean islands, the Greek parliament in the 300-member house, where the leftwing Syriza party of Alexis Tsipras, the prime minister, and his coalition partner, Independent Greeks, together control a fragile two-seat majority, voted contentious pension cuts and income tax increases, covering the bulk of a €5.4bn package of austerity measures demanded by creditors. That sets the scene for a meeting of the Eurogroup today to decide how much more the Greeks still need to do.
Despite the successful vote, Greece is far from in the clear. Before closing its review of Greece’s bailout and providing Athens much-needed aid, the IMF and the German government are insisting Athens go a step further an legislate an additional by many so called “fruitless €3bn in “contingency measures,” in case the agreed cuts prove insufficient to meet budget surplus targets.
Greece seems now committed to completing a first review of its €86bn bailout after six months of foot-dragging over details of the reforms.
A senior Greek official said:
“It’s a positive development for Greece after weeks of fighting hard against the contingency measures.”
Though despite weeks of intensive talks, negotiators are no closer to a deal then they were when they were sent back to Athens two months ago.
Program discussions between Greece and the institutions have made progress in recent weeks, but significant gaps remain to be bridged before an agreement can be reached that would include the IMF under one of our program facilities. I think it is time for me to clarify our position, and to explain the reasons why we believe that specific measures, debt restructuring, and financing must now be discussed simultaneously.
She does not seem to believe in a sequential handling of the matter. For her the eurozone must agree to grant sweeping debt relief to Greece before she can commit to the programme. Wolfgang Schäuble, Germany’s finance minister, does not like that at all.
The long-running soap shows that the size of its debt has outgrown Greece. It is still not clear if the population got convinced that the major problem plaguing the Greek economy is not only the continuing corruption of the ‘bankster puppet government’, which keeps using austerity packages to target tax increases at the productive sectors of the economy instead of cutting generous upper tier supplementary pension and other government waste, but also the fault of all those people who do not seem to see any harm to fraud the government and its security system.
Germany, Finland, and the Netherlands, are not very eager give Greece debt relief. Greek left-wing Greek economist and current Greek Minister of Finance Euclid Tsakalotos said some form of debt relief was crucial to give a
“vote of confidence in the Greek economy and the Greek polity”.
He also needs something to bring home to his electorate, where print media went on strike at the end of April against pension reforms.
The Belgium government also could learn some lessons from what could happen to their citizens when they continue like the Greek government of Alexis Tsipras which refuses to cut the higher end pensions of the bureaucratic and technocratic elite. When the parliamentarians of European countries keep cutting on the ordinary people their income, by continuing bringing new and higher taxes they get them more dissatisfied, frustrated and shall have them not interested in those politicians who promise a lot but do not keep their promises. The loss of credibility will undermine the values of the European Union and create more hate against any newcomer in the country, this at a time when Europe is over-flooded with refugees.
By making the common people having less money to buy products, the revenue shall decrease and the country will be worse of than by not pampering the multinationals and those who have already enough money. Always targeting on the ordinary citizens will have the younger generation warned for the ‘crooks’ of politicians by their parents. The youngsters nothing left, no jobs, no savings, no business opportunities, no property and the pensioners not able to help them, also not having left much over to provide in their own living. as such a very frustrated population shall continue to grow until the balloon burst and the bomb under Europe explodes.
With a referendum on Britain’s EU membership in June and a possible flare-up of the refugee crisis as summer approaches, the last thing Europe needs is another Greek drama. The European Commission is thus in a mood for compromise. It emphasises that negotiations are “99%’’ complete. But the other creditor, the IMF, is less forgiving. With tax arrears in Greece rising and reforms constantly delayed, the fund has little faith that the programme’s target of a 3.5% primary budget surplus by 2018 can be achieved. It wants Greece to make a contingency plan to raise more money or cut spending further before it approves the next instalment of the bail-out.
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