“Everyone wins… except the Greek people of course, but they lost long ago.”
As part of its third bailout from this summer when the party that was elected on an anti-austerity, “no more debt” platform caved to Europe’s every demand (under the threat of deposit confiscation and bank failure) and promised to unleash even more “austerity”, while raising Greek debt to 200% of GDP over the next few years, Athens was supposed to get its first €2 billion installment of the first €26 billion tranche for discretionary spending purposes sometime around now.
Unfortunately, it isn’t, if only for the time being, for the simple reason that – surprise – it hasn’t implemented most of the reforms demanded under the terms of the Third bailout agreement.
According to Reuters reports, the country and its international creditors “remained at odds over the treatment of non-performing loans at Greek banks, a government official said on Sunday, holding up part of the first installment of aid under a multi-billion-euro bailout.”
Furthermore, “discussions have stumbled over how to foreclose on non-performing loans at Greek banks. Athens insists resolving the issue should not result in thousands of Greeks at risk of losing their homes.”
According to Kathimerini, the key issues being discussed over the weekend were the criteria that apply to home repossessions, the rules governing the 100-installment payment plan for unpaid taxes and the coalition’s continuing efforts to find a fiscal measure to replace the 23 percent value-added tax rate on private education, which it agreed in the summer but has since pledged to scrap.
On the issue of primary residence repossessions, the Greek government is trying to find a formula that would protect at least half of local homeowners, compared to the proposal from the institutions, which would lead to just 20 percent not facing the threat of losing their home if they do not keep up with their mortgage repayments.
The two sides’ positions on the installment scheme, which allows taxpayers who have amassed debts to the state to pay them off in up to 100 tranches, also differ substantially. Greece’s lenders want those who enroll in the scheme to be removed from it if they miss a payment by more than a day, compared to the current 26-day grace period they have been given. Athens is mulling the possibility of gradually reducing the limit from 26 days and linking it to the performance of the country’s economy.
Greece’s progress in meeting the terms of the bailout is due to be assessed at a meeting of euro zone finance ministers, known as the Eurogroup, on Monday. “There is a distance with lenders on that issue, and I don’t think that we will have an agreement soon,” a government official told Reuters.
Reuters adds that the Greek Prime Minister Alexis Tsipras and European Commission President Jean-Claude Juncker discussed the bad-loans issue by telephone on Sunday. French President Francois Hollande and German Chancellor Angela Merkel also talked about it by phone, another government official said.
The problem is that having done what it always does, namely kicked the can since the summer, the creditors are actually demanding credible reform. That may be a challenge: public dissent already stirring over broad terms of the bailout – a nationwide strike has been called for Nov. 12 – the official said Greece would stand its ground.
“This call is the first step for the issue to be solved at a political level,” the government official told Reuters. “We will use all the time (we have at our disposal) to reach an agreement and discussions might continue on Monday morning if required.”
Yes, this means that the endless Greek soap opera may be coming back for another season, even though this time it is assured to be an utter and total flop and zero viewership, following this summer’s anticlimatic and farcical conclusion.
Perhaps realizing that another wave of social unrest and failure to obtain creditor cash may well lead to a violent social upheaval, Tsipras seems to be contemplating a Plan B, one which would see Greece accept thousands of refugees destined for Europe in exchange for getting the earmarked cash without any reform.
Kathimerini reports that Citizens’ Protection Minister Nikos Toskas suggested that the Greek government would be willing to consider opening a safe passage for refugees through the fence on the Evros border in northeastern Greece if there is an agreement with Turkey, Bulgaria and the European Union.
“We can’t just open everything when there is a danger that everything will close in Europe,” said Toskas in reference to other eastern and central European countries installing fences at their borders.
Well, you can… if there is enough incentive, like allowing the government to reneg on most of its promised reforms (avoiding another period of social unrest) and instead getting a few billion in wire transfers in exchange for accepting several thousand Syrian refugees.
Everyone wins… except the Greek people of course, but they lost long ago.