Greece will probably stay in the Eurozone but at what cost?

“We will do anything you want, but please open our banks next week, will you?” This could be what Alexis might as well be begging from Mario at the EuroSummit of last Tuesday. From left to right, Alexis Tsipras, Prime Minister of Greece and Mario Draghi, Governor of the European Central Bank (Council TVnewsroom, 07/07/2015)

The technical teams of the European institutions are now discussing the Greek proposal which was approved yesterday evening by SYRIZA’s governmental council and submitted to the institutions minutes before the deadline in order to have a final agreement at tomorrow’s Eurogroup. The fact that the Greek government has come up with a more professional and as close as it can get to the institutions’ proposal is facilitating things in technical but also in political level.

The German side expressed by its Finance Minister Wolfgang Schäuble revealed that the largest economy in the EU is open to discuss about a small debt restructuring in exchange of immediate deep reforms accepting the view of the International Monetary Fund (IMF). This statement comes at the most crucial moment where a mutual agreement sounds as the only way that will be beneficial for everyone.

But even if the final agreement is not going to refer to a potential debt restructuring, even in that case, the Greek government has been elected to remain in Eurozone and EU at all costs and sign it. The problem will be if the rest of European leaders have different opinion and don’t want to make a mutual deal. Thus, being unable to make the Greek government resign they are willing to further sink it to the bottom by forcing it to take further austerity policy measures.

Final proposal

This is the last and most critical discussions that are taking place between Greece and European Central Bank (ECB), the IMF and the European Commission. All sides are tabling this very moment to agree on all aspects of the three-year programme and the almost 12 billion euros structural reforms and measures to be taken by the Greek government late last night. Friday the 10th is the most crucial day since it will determine whether the agreement will be cut leading to a Eurogroup and a EU Summit this weekend or it will throw Greece out of the EU; to the abyss of bankruptcy and drachma printing.

The renewed proposal that was submitted by the Greeks is believed to contain similar to the institutions measures regarding VAT rates increase and early retirement rules which reveals the willingness of Greece to strike a deal now. The point that remains to be seen though is whether the EU leaders want to humiliate the Southern country by continuing the five-year austerity policy or they are prepared to practically aid by adding to its growth and prosperity. The latter can be achieved not only by fundamental reforms but by a debt restructuring as well.

Berlin plays down its strictness

Wolfgang Schäuble stated that Germany suddenly considers now a small debt restructuring, which is unprecedented taking into consideration his stance against Greece’s debt crisis but in line with the recent report published by the IMF. This report favors a Greek debt relief which is characterised as mandatory.

Thus, judging from the latest events on this issue, we can clearly see that Germany is slightly changing its attitude to the negotiations by leaning to the Greek side attempting to close the deal and keep Greece within the EU.

One of the things that the German politicians keep on shouting is that the Greek government is not implementing all the needed measures which according to them are going to revive the economy. The German Finance Minister told his Greek counterpart at the last Eurogroup that “Greece needs to implement reforms to win the trust of its eurozone partners” and urged him to “Just do it!”.

Greek government seeks political approval

Late last night, the Greek government submitted the proposal not only to the institutions but also to the Greek Parliament in order to be approved by the Committee and Plenary. This will be a very strong “negotiating card” in the hands of Alexis Tsipras who will show Brussels that the Greeks have the political will to proceed to structural reforms as soon as possible.

However, the Greek Premier is not going to move to a unilateral action before Saturday’s Eurogroup meeting where the Finance Ministers of the Eurozone will decide on the faith of Greece. Mr Tsipras wants just to make it clear that the Greek parliament will vote for the final agreement making it a law of state to implement all the measures included in it at once.

Just three days left; No Grexit is foreseen

There is no time left for Greece which made the last attempt to close the coveted deal for a financial package from the European Stability Mechanism (ESM) in order to cover its financial needs for the next three years.

It is now up to the institutions’ and leaders’ hands to decide whether the final proposal is adequate to prevent a Grexit or Greece will be the first country in Eurozone’s history to leave the bloc once and for all.

All the evolutions during the last 2 days reveal the willingness of both sides to reach a deal. From the resign of Yanis Varoufakis, ex-Finance Minister of Greece, to the by far better and closer to the institutions demands proposal of the Greek negotiating team, till the acceptance of a possible debt restructuring by Berlin.

All in all, a deal may come but it is not sure yet if it will help Greece overcome this long-lasting crisis since the measures that need to be implemented are harsh and painful for the lower and middle class people.

Thus, everything reveals that there is not going to be a win-win situation after all and the Greek citizen is once more going to be the one to lose from all this mess.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

The 28 EU leaders care more about fiscal orthodoxy than effectively fighting youth unemployment

Greece @ MWC14: Greek-born mobile champions at MWC 2014

Scotland in United Kingdom: It’s either the end or the beginning of the end

G20 LIVE: G20 Statement on the fight against terrorism

Joris in Indonesia

Google strongly rejects EU antitrust charges and now gets ready for the worst to come

The US repelled EU proposals on common rules for banks

Eurozone 2013: Where to?

How much more social deterioration can the EU people endure?

Intel, Almunia and 1 billion euros for unfair potatoes

The succesful cooperation

Italy’s rescue operation Mare Nostrum shuts down with no real replacement. EU’s Triton instead might put lives at risk

Unanswered questions for Europe’s youth in President Juncker’s State of Union

It ain’t over until Google says it’s over

Migration crisis: how big a security threat it is?

Greece returns to markets at a high cost to taxpayers, after four years out in the cold

Why Commissioner Rehn wants us all to work more for less

TTIP: why it is worth not to pull the covers over your head?

EU Commission: a rise in wages and salaries may help create more jobs

Tax evasion and fraud threaten the European project

Fostering global citizenship in medicine

No way out for Eurozone’s stagnating economy

Britain heading to national schism on exit from EU

Cross-roads

The IMF sees Brexit’s ‘substantial impact’ while the world’s economy holds its breath

Is the EU competent enough to fight human smuggling in 2015?

OECD tells Eurozone to prepare its banks for a tsunami coming from developing countries

How Germany strives to mold ECB’s monetary policy to her interests

Banks suffocate the real economy by denying loans

Will Brexit shatter the EU or is it still too early to predict?

Assembly of European Regions @ European Business Summit 2014: The European regions on the path to recovery

Breaking barriers between youth in the new tech era: is there an easy way through?

IMF’s Lagarde indirectly cautioned Eurozone on deflation

Population in crisis hit EU countries will suffer for decades

Any doubt?

EU threatens Japan to suspend FTA negotiations if…

Migration crisis, a human crisis after all

The Banking Union divides deeply the European Union

A new crop of EU ‘Boards’ override the democratic accountability and undermine the EU project

Germany tries to save Europe from war between Ukraine and Russia

EU to gain the most from the agreement with Iran

EU countries invested €5 trillion abroad

What we need for a better European Solidarity Corps

Azerbaijan chooses Greek corridor for its natural gas flow to EU

ECOFIN: Protecting bankers and tax-evaders

French Prime Minister passes Stability Program and takes his ‘café’ in Brussels this June

Migration Crisis: how to open the borders and make way for the uprooted

EU Parliament raises burning issues over the FTA with the US

Why growth is now a one way road for Eurozone

The impossible end of the war in Syria

Access to healthcare: what do we lack?

Does EURES really exist?

Brussels wins game and match in Ukraine no matter the electoral results

New VAT rules in the EU: how a digital sea could have become an ocean

Yes, together we can make a change! YO!Fest and EYE 2016

ECB should offer more and cheaper liquidity if Eurozone is to avoid recession

Commission goes less than mid-way on expensive euro

Except Poland, can climate change also wait until 2021 for the EU Market Stability Reserve to be launched?

Why banks escape from competition rules but not pharmaceutical firms

What the US and the world can expect from the 8 November election?

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 )

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s