Tsipras doesn’t seem to have learned his “almost Grexit” lesson and Greece faces again financial and political dead end

Handshake between Alexis Tsipras, on the left, and Jean-Claude Juncker/ Date: 17/02/2016. Location: Brussels – EC/Berlaymont. © European Union, 2016 / Source: EC – Audiovisual Service / Photo: Etienne Ansotte.

Handshake between Alexis Tsipras, on the left, and Jean-Claude Juncker / Date: 17/02/2016. Location: Brussels – EC/Berlaymont. © European Union, 2016 / Source: EC – Audiovisual Service / Photo: Etienne Ansotte.

The teleconference of the EuroWorking Group which took place yesterday is the forerunner of the extraordinary meeting of the Finance Ministers of the Eurozone on May 9 where Greece’s programme review is about to be discussed. The outcome was, as expected, disappointing regarding the agreement between the two sides on the package of basic and contingency measures as well as their implementation mechanism.

The difference that remains to be bridged between Greece and its creditors is the contingency measures and how they are going to be put into force. The Greek Prime Minister must decide whether to legislate the back-up measures as the IMF proposes or postpone the bailout programme review and put Greece into a greater economic suffocation.

July is the deadline for Greece when 2.3 billion euros must be repaid to the European Central Bank. Without a deal, the country risks of defaulting. The only positive news for Greece is that a possible debt relief is on the agenda of next Monday’s meeting.

Germany doesn’t worry much for Greece

The German Finance Minister shows no concern that a big crisis will happen in Greece. More precisely, Wolfgang Schaeuble stated last Tuesday: “We will have no big Greece crisis this year. The country was on its way to making visible progress.”

However, the sayings of the Finance Minister may imply also the fact that Europe has already created the mechanisms to minimize the consequences of a possible Grexit and thus an organized exit of Greece from the Union for a specific period of time is not going to affect the rest of the European economies.

Tusk urges both sides for an agreement

The president of the European Parliament (EP) presses the negotiations on the Greek bailout review to be concluded by the end of the month and provide additional help to the global economic stability. More in detail, Donald Tusk mentioned last Tuesday during the meeting with Japanese Prime Minister Shinzo Abe and European Commission president Jean-Claude Juncker: “I urge finance ministers to reach an agreement very soon and I hope that by the end of May, when we meet at the G7 summit, the implementation of Greece’s programme is positively assessed. I want to encourage all the ministers and institutions to re-double their efforts in finalising the review. We need to make sure that Europe contributes to stability rather than global instability. We should do all in our power to dispel uncertainties. There is no doubt that a successful completion of the ongoing review of Greece’s programme would strengthen confidence.”

Contingency measures: Main negotiating thorn

The main difference that still hasn’t been agreed is the implementation of the extra measures which will be taken in order to meet the budget surplus of 3.5% of Gross Domestic Product (GDP) in 2018. These measures are proposed by the IMF which is requesting that these must be legislated in advance while the Greek government is proposing the activation of an automatic mechanism for cutting state spending in case the state misses its budget targets.

It seems that either the IMF is not confident that Greece will meet the targets based only on the 5.4 billion euros basic package of measures or the IMF wants to pose more difficulties and prevent the deal to be sealed just like last summer.

On the other hand, the Greek officials deny to take more measures beforehand extending the assessment considering that they have a strong negotiating position against the creditors. But this tactic does not seem to be logical at this point taking also into consideration that it wasn’t beneficial for Alexis Tsipras during last summer’s negotiations either.

Time constraints are against debt relief agreement

There are only a few weeks left till July when Greece must have positively passed the bailout review and receive the next tranche of 5.7 billion euros from the ECB, ESM and EC in order to be able to repay the ECB.

The positive news for Greece is that the Eurozone Finance Ministers will discuss, apart from the package of reforms, the sustainability of Greece’s public debt according to the official agenda of the Eurogroup meeting.

However, this issue has long been discussed and asked to be put into the negotiating table (by the Greek government) without any progress and it is highly unlikely that a solution will be provided now in such a short period of time.

Europe cares more for Britain than Greece

The UK referendum which takes place next month is far more important for the Old Continent than a possible Grexit. The European officials are willing to conclude with the Greek programme review as soon as possible and certainly before the end of May in order to focus on how to persuade the British people to vote in favor of staying inside the EU on June 23.

All in all, the Greek government and its Prime Minister Alexis Tsipras do not seem to have learned their lesson and are about to commit similar mistakes of last summer bringing the country into economic and political deadlock and the Greek citizens into great despair.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

European Business Summit 2014: The role of youth entrepreneurship education in EU’s Strategy for Competitiveness

What options the new President of Ukraine has?

From Grexit to Brexit: UK industry now says the in/out referendum is good for your health

Global Citizen – Volunteer Internships

Draghi rehabs ECB into a tool to support growth and employment; a departure from Teutonic orthodoxy

The US bugged Europe: Is this news?

MasterCard at European Business Summit 2015: A focus on innovation will drive inclusive economic growth for Europe

Commission deepens criticism on German economic policies

Why lay people don’t expect anything good from G20

GREXIT final wrap-up: nobody believed Aesop’s boy who cried wolf so many times

A Sting Exclusive: “Doing ourselves a favour”, Vice President Dombrovskis underscores that this time growth has to come from within the EU

EntEx Organises 5 Summer Schools for Young Entrepreneurs across Europe in June/July 2014

“As German Chancellor I want to be able to cope with the merger of the real and digital economy”, Angela Merkel from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

Pharmaceuticals conceal drug side effects with the EU’s Court blessing

No better year for the EU’s weak chain links

Eurozone needs more than some decimals of growth

Trump to run America to the tune of his business affairs

G20 LIVE: “International communities and leaders have great expectations for 2016 G20 summit in Hangzhou China”, Mr Wang Xiaolong, the Chinese Foreign Ministry’s special envoy stresses live from G20 in Antalya Turkey

Ukraine undecided over a strategic partnership with the EU

China-EU Special Report: Chinese Premier Li Keqiang endorses China’s big investment on Juncker’s plan at 10th China-EU Business Summit

EU to negotiate an FTA with Japan

A critical European young voice on Net Neutrality: the distance between Brussels and Washington

TTIP’s 11th round starts in Miami but EU-US businesses see no sunny side

The ECB again takes care of the bankers not the people

Commission’s feeble response to financial benchmarks fraud

Fair completion rules and the law of gravity don’t apply to banks

Towards the Rise of the United States of the Atlantic?

High-technology manufacturing saves the EU industry

Syria: Why did the US-Russia brokered ceasefire collapse? What does the duo care for?

The EU Commission lets money market funds continue the unholy game of banks

EU security and defence industry prepares positions for ‘producers’ and ‘customers’

Greece’s last Eurogroup or the beginning of a new solid European Union?

Financial Transaction Tax: More money for future bank bailouts?

How much more political is the new EU leadership? Does this include personal bend?

COP21 Breaking News_07 December: “Remove Roadblocks to Climate Action”

Eurozone: Inflation plunge to 0.4% in July may trigger cataclysmic developments

“C’est la vie”? French recession and unemployment to linger in Eurozone

China Unlimited Special Report: The trip to China

May a parody constitute a copyright infringement? European Court of Justice to give the answer

WEF Davos 2016 LIVE: “It is the implementation, Stupid!”, German Finance Minister Wolfgang Schaueble points the finger to Greece from Davos

A Sting Exclusive: “Climate Change needs to be demystified”, Anneli Jättenmäki Vice President of European Parliament underscores from Brussels

MWC 2016 LIVE: Getty chief says one in four new images from phones

The EU pretends not knowing what happens in the Western Balkans

Austerity lovers and ‘relaxationists’ fight over the EU budget

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

Why the merchant ships can pollute the atmosphere with CO2 quite freely

Do the EU policies on agro-food smell?

An EU Summit without purpose

EU seeks foreign support on 5G from Mobile World Congress 2015 as the “digital gold rush” begins

On Human Rights Day European Youth Forum calls for end to discrimination of young people

Greece may offer to China a European gateway

Court of Auditors: EU spending infested with errors well above the materiality threshold of 2%

Migration has set EU’s political clock ticking; the stagnating economy cannot help it and Turkey doesn’t cooperate

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

Summer JADE Meeting 2015: We came curious, we left inspired

The Parliament sets the way for the European Banking Union

ECB is about to lend trillions to banks

A Sting Exclusive: why the environment is important to your health, by UNEP’s Head for Europe

German stock market is not affected by the Greek debt revolution while Athens is running out of time

“If they think they can slave an entire nation, then they will just have the opposite results!”, Alexis Tsipras cries out from the Greek parliament

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