AFTER the all-night meetings and prevarication by the politicians, Greece appeared to have reached a deal with the Troika over the drastic austerity measures that would have to be taken for the €130b bail-out. But this was not the end of the protracted saga, as finance minister Evangelos Venizelos found out when he met with eurozone counterparts in Brussels on Thursday.
The Chairman of the Euro-group Jean-Claude Juncker set three conditions Greece had to meet before the bailout funds were released. The Greek parliament had to ratify the raft of measures agreed with the Troika by Sunday and the Greek government should make additional spending cuts of €325m. Thirdly, he wanted “strong political assurances from the leaders of the coalition parties on the implementation of the programmes”.
In short, Juncker did not trust Greece’s government and political parties to honour their side of the deal and wanted to see action before any funds were released. On the sidelines of the meeting, according to some reports, fears were expressed that Greece could default after receiving the bail-out funds. While these are just rumours, the lack of trust is understandable, to a large extent, given the behaviour of Greece’s politicians.
Many of the measures agreed before the first bail-out in 2010 have still not been implemented. The leader of the New Democracy party Antonis Samaras, who hopes to be elected prime minister in two to three months, has still not signed a letter, demanded by the EU, committing to the spending cuts and reforms. Venizelos openly attacked him over this, after Thursday’s meeting, claiming it was the reason his counterparts had set new conditions for the bail-out.
Samaras continued to make statements about “negotiating hard” and “looking after ordinary people and pensioners”, on Thursday, but the politicians could be losing their influence. Yesterday a 48-hour strike against austerity measures began and unions have vowed to fight the “painful” reforms, which include a 20-per cent reduction of the minimum wage to €600 and 15,000 job cuts in the public sector. “There will be a social uprising,” warned a union boss.
The latest figures show the unemployment rate at a record high of 20.9 per cent. To make matters worse, the contraction of the economy will make it extremely difficult for tax revenue targets to be met, raising the spectre of more spending cuts. How will the country ever get out of this unprecedented recession, now in its fifth year? Even the representatives of the IMF are expressing doubts.
In the end, Greece will probably satisfy the conditions set by the eurozone finance ministers and receive the €130b bail-out – there is no choice – but that won’t end the crisis, either for Greece or the eurozone.
