PM weigh­ing im­pact of im­passe

As gov­ern­ment’s bid for bailout re­view deal be­fore March falls by way­side, Athens mulls path for­ward

Kathimerini English - - Front Page -

As Greece’s in­ter­na­tional cred­i­tors seem in­creas­ingly un­will­ing to cut the gov­ern­ment any more slack, the ne­go­ti­a­tions over the sec­ond re­view of the coun­try’s third bailout do not ap­pear to be head­ing to a con­clu­sion any time soon, es­sen­tially dash­ing the gov­ern­ment’s hopes of clinch­ing a deal be­fore na­tional elec­tions be­gin in ma­jor Euro­pean coun­tries from March on­wards.

And if Prime Min­is­ter Alexis Tsipras didn’t have enough on his plate, cred­i­tors have, ac­cord­ing to sources, also added the re­duc­tion of the tax-free ceil­ing – if not now then in Jan­uary 2018 – to their list of de­mands in or­der to con­clude the re­view.

For now, Tsipras is dis­miss­ing the de­mand on the grounds that rul­ing SYRIZA’s par­lia­men­tary group would not sup­port such a mea­sure.

More­over, the po­lit­i­cal cost would be risky given the com­fort­able lead the op­po­si­tion con­ser­va­tive party en­joys in the polls: The lat­est sur­vey con­ducted by the Univer­sity of Mace­do­nia on be­half of Skai TV showed SYRIZA trail­ing New Democ­racy by 16.5 per­cent.

Given the above con­straints and the lack of progress in ne­go­ti­a­tions, ex­pec­ta­tions at to­day’s Eurogroup re­main ex­tremely low.

Ac­cord­ing to gov­ern­ment aides, the only per­son among the coun­try’s cred­i­tors ac­tively push­ing for a swift con­clu­sion is Eurogroup chief Jeroen Di­js­sel­bloem, who wants to present a Euro­pean suc­cess at home ahead of na­tional elec­tions on March 15 in The Nether­lands.

How­ever, nei­ther Ber­lin nor the In­ter­na­tional Mon­e­tary Fund (IMF) ap­pear will­ing to make this easy for Tsipras.

The out­come of the im­passe in talks could be a pro­tracted stand­off be­tween Athens and Greece’s cred­i­tors that could last un­til April in the best case, and June in the worst.

The gov­ern­ment claims it has enough in state cof­fers to last un­til then, while the next big debt re­pay- ment to in­ter­na­tional cred­i­tors is not un­til July.

With this sce­nario, Tsipras will seek to buy time, hop­ing that Ber­lin and the IMF will soften their stance in the mean­time.

More specif­i­cally, Athens an­tic­i­pates that the IMF will no longer fund the Greek pro­gram and thus climb down from its de­mands for more mea­sures to be im­ple­mented now.

Se­condly, it is hop­ing that the clash be­tween Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble and Martin Schulz – the So­cial Demo­cratic Party’s can­di­date for chan­cel­lor – over the “Greek is­sue” will force in­cum­bent An­gela Merkel to pre­vail over her fi- nance chief to back down from his tough stance.

But the risk at­tached to pro­tracted ne­go­ti­a­tions is a big one for Tsipras, as the frag­ile prospects of eco­nomic recovery could be fur­ther un­der­mined if the pre­vail­ing cli­mate of un­cer­tainty con­tin­ues.

For this rea­son, early elec­tions can­not be ruled out, even though the gov­ern­ment de­nies it is con­sid­er­ing this op­tion as its Plan B.

An­a­lysts be­lieve the strong rhetoric used by Tsipras dur­ing his par­lia­men­tary de­bate with New Democ­racy leader Kyr­i­akos Mit­so­takis on Fri­day had all the hall­marks of an elec­tion cam­paign.

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