Although Greece is struggling to pay salaries and pensions Varoufakis is “optimistic”; the Sting reports live from EBS 2015

Yanis just could not miss the European Business Summit 2015 last week in Brussels. Yanis Varoufakis is still Greece's Minister of Finance. (EBS 2015)

Yanis is transforming into a superstar these days in Brussels. He just could not miss the European Business Summit 2015 last week in Brussels. Yanis Varoufakis is Greece’s Minister of Finance. (EBS 2015)

The Greek government found a very last-minute solution to pay its debt to the International Monetary Fund (IMF) that was only due yesterday. However, it was last Thursday when Yanis Varoufakis was appearing to be optimistic about Greece’s situation and the overall negotiations with its creditors while attending the European Business Summit (EBS) 2015 where the European Sting was official media sponsor.

Regarding the outcome of last Monday’s Eurogroup, it was evaluated that Greece has made some progress but needs to try harder in order to make the desired agreement and unlock the tranche of 7.2 billion euros; money that will save Greece from an imminent bankruptcy since almost all its reserves are over. The European Central Bank (ECB) keeps on supporting the Greek banks through the Emergency Liquidity Assistance (ELA) mechanism due to the positive climate of the negotiations. But the ECB added to ELA only the necessary funds in order for the Greek banking system to barely float.

At the other side of the Atlantic, the IMF is supporting the increase of the Greek Value Added Tax (VAT) rates as mandatory in the reform system. This measure will have a direct effect on the lower and middle class revenues and will definitely deepen the crisis in an already devastated economy.

Greece uses an emergency reserve account to repay IMF

Yannis Stournaras, the Governor of the Greek central bank, found a way to repay the IMF in a meeting he had with the Vice-President and the Chief Economics Spokesman of the Government of Greece. Mr Stournaras proposed to Mr Dragasakis and Mr Tsakalotos, respectively, to withdraw the required amount of money from an account of the Greek Central Bank that is used in emergency cases and basically holds reserves from the IMF that are denominated in Special Drawing Rights, consisting of various international currencies.

Thus, the government withdrew 650 million euros by this reserves account after approval was given by the IMF. The rest 100 million euros which are necessary for the repayment were provided by the government’s cash reserves.  However, the Greek government will have to put this money back to the account in less than a month otherwise an interest rate will be imposed.

EBS 2015: Eurogroup’s forerunner

The Greek Finance Minister attended a debate during the European Business Summit 2015 last week as member of the discussion panel together with Pierre Moscovici, European Commissioner for Economic and Financial Affairs, with the topic “Structural Reforms:  Why are structural reforms so important for digitalization too?”.

At this session Mr Varoufakis mentioned that no final decision will be made in the meeting of the Eurozone Finance Ministers, which was to happen and took place last Monday, but the moment that this will happen is not any more far away. Particularly, in an “exclusive” interview at BBC World last Thursday at EBS he stated: “Europe works in glacial ways and eventually does the right thing after trying all alternatives.  So we probably won’t have an agreement on Monday, but certainly we’re going to have an agreement in the next couple of weeks or so.”

The European Sting, as official media partner of the event, not only was reporting live from the Summit but also contributing with 7 exclusive interviews from prominent personalities to the European business agenda which this year focused on how the industry and the society are affected by digitalization; the driving force behind the forth revolution.

Progress made but which will be the next step?

The European leaders and Finance ministers came to the conclusion at EBS that the Greek government is trying to implement a reforming system which at the end of the day is not enough to satisfy the institutions in order to lend money to Greece. There are measures that the left-wing party Syriza denies to further discuss because they lie on the grounds of the “red lines” that they have promised to the Greek people.

It is obvious that Greece is barely standing on its own feet and Europe keeps on pushing, instead of providing a “crutch”. Thus, the major challenge that Mr Tsipras and his government are facing now is the reforming of the labor and social security system. Will they be able to suggest alternative equivalent measures or impose the institutions’ proposals making a U-turn to their pre-election promises?

One thing is for sure though; time has almost run out for the Greeks who in general tend to take action at the very last minute. But whichever the next step will be, a solution must be found before a Graccident occurs driving to a default the sunny Southern European country of 11 million inhabitants.

ECB is influenced by the Eurogroup

The ECB decided yesterday to further raise the ceiling of ELA to 80 billion euros. This provides Greece with some more days to continue and finish successfully the technical talks with its creditors. The 1.1 billion euros increase proves that the ECB is clearly affected by the statements of the Eurozone’s Finance Ministers.

However, this comes in conflict with the statements of Yanis Varoufakis and Jeroen Dijsselbloem who mentioned two days ago that the ECB is independent and is not forced by the European leaders. This showed that most of the times things are not the way they seem and an action is always followed by a respective reaction. Unfortunately, the ECB has proved many times that is good part of the chain of the European political system.

IMF: one step ahead, two steps back

IMF officials are seriously discussing to propose to the Greek government to raise the unified VAT rates up to 21%. This means that everything, from electricity to food, will increase to the level that the lower and middle class will not be able to pay its bills and buy the basics from the supermarket anymore. These austerity measures are not helping an economy like the Greek one to revive but on the contrary they further “pushing it off the cliff”.

Some weeks ago, the IMF proposed to the ECB and the EU to relieve Greece by cutting a part of its debt. This action however contradicts with their current suggestions about a VAT rates increase. Why does the IMF make this step backwards?

No matter what the reason is, the Greek government has better stay focused and fight for a fair and constructive final agreement till the end of May since there are no more emergency reserve accounts that could “save the day” and pay wages, pensions and external debts.

And the Greek drama is to be continued.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Climate action ‘both a priority and a driver of the decade’: Guterres

Finland is a world leader in clean energy. Here’s what’s driving its success

Trump’s Russophiles under investigation, Europe remains ‘en garde’

Syria war: executions condemned as violence continues ‘on both sides’ of border with Turkey

Now is the time to seize ‘unprecedented opportunity’ of the Sustainable Development Forum, says ECOSOC President

Afghanistan extends ceasefire with Taliban; UN urges both sides to work towards lasting peace

EU and China in search of a win-win agreement through strategic cooperation ahead of the EU-China summit

‘Wind blowing in the direction of peace’ in Africa: UN Secretary-General

Harnessing the power of nature in the fight against climate change

Rule of law in Hungary: Parliament should ask Council to act, say committee MEPs

COP25: ‘Signals of hope’ multiplying in face of global climate crisis, insists UN chief Guterres

Council Presidency: Floundering with the EU 2014 budget

EU Banks still get subsidies from impoverished citizens

Century challenge: inclusion of immigrants in the health system

State aid: Commission approves €53 million public support scheme for charging stations for low emission vehicles in Romania

Is China about to launch its own cryptocurrency?

European Health Union: Commission publishes open public consultation on the European Health Data Space

Trade preferences boost developing countries’ exports to the European Union

These are New York Public Library’s 10 most borrowed books

Bank resolutions to remain a politically influenced affair

China in my eyes

5 charts that show renewable energy’s latest milestone

Making the move to more sustainable mobility – three steps for companies

This young activist explains how to change the world in 3 steps

Hungary’s emergency measures: MEPs ask EU to impose sanctions and stop payments

Telemedicine: union when the rule is isolation

International partners pledge $1.2 billion to help cyclone-hit Mozambique recover, ‘build back better’

Vulnerable young people must not be blamed & stigmatised for violent radicalisation

Scotland wants to create an ethical stock exchange (Post Brexit)

Addressing the Challenges of COVID-19 Vaccination

The future of the plastics industry is green

A clean energy future with hydrogen could be closer than we think

Human rights breaches in Guinea Conakry and Madagascar

Art, mental health and suicide: different strategies for increasing access to health services

As human genome editing moves from the lab to the clinic, the ethical debate is no longer hypothetical

How debt for climate swaps could spur a green recovery

The UN’s unyielding effort to tackle sexual abuse and exploitation: our quarterly update

Security Union: Significant progress and tangible results over past years but efforts must continue

Impact investing in Latin America and addressing the ‘missing middle’

Governments must take further action to boost job opportunities at an older age

EUREKA @ European Business Summit 2014: Innovation across borders – mobilising national R&D funds for transnational innovation in Europe

The world’s impact in a small Brazilian town and the increased demand for mental health

Long-term EU budget: The Union’s ambitions must be matched with sufficient reliable funding

Time to pay up: UN summit to push for development finance breakthrough

‘Great cause of concern’ UN chief tells Security Council, surveying ‘bleak’ state of civilian protection

How Islamic finance can build resilience to climate change

Further reforms in France can drive growth, improve public finances and boost social cohesion

The best companies to work for in 2020, according to Glassdoor

Countries must up their game to reduce low birth weights, warns UN-backed report

Libya: EU efforts should focus on protecting migrants, MEPs say

MWC2021 Launches New Initiative to Widen Access for Spanish Industry Professionals

One in three children do not get the nutrition they need

Largest joint UN humanitarian convoy of the war, reaches remote Syrian settlement

Is the EU denying its social character favouring a banking conglomerate?

Why the UN is investigating poverty in the United Kingdom

Sustainable fishing staying afloat in developed world, sinking in poorer regions

A comprehensive strategy for Eurozone’s long term growth gains momentum

Silk Road Unlimited

This is how Europe is helping companies and workers as the coronavirus crisis deepens

UN chief announces progress on committee to shape Syria’s political future

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s