Greeks Have a Good Feeling: Lenders Positive on Program Extension…

Posted by in Economy

Greeks got the feeling, that the climate is changing, it’s turning from negative-rejecting to positive- supportive. Some hints in this direction came from here and there yesterday, claim the Greek media.  The country’s international lenders hint Greece may get the desired two-years extension. That apparently the total message from the Eurogroup meeting in Nicosia on Friday according to Greek press:

  •  Lenders want Samaras government to take “decisive action”.
  • IMF-head Christine Lagarde ascertains “progress efforts and winks with a possible program extension.
  • Same attitude comes from Greeks’ EU partners by Dutch and Austrian finance ministers.
  • Eurogroup chief J-C Juncker confirmed he wants Greece inside the euro zone.

At the same time, Juncker said that decisions on Greece will not likely be made until the second half of October.

Jean-Claude Juncker says Greece will not learn whether it΄s done enough to get its next batch of bailout cash for at least a month. The decisions on Greece will not likely be made until the second half of October, the Associated Press reported.

The Greek government is trying to cobble together an €11.5 billion austerity package to satisfy its international creditors.

However it looks as if Greece’s lenders reject austerity program extension combined with additional funding.

Finance Minister Yiannis Stournaras confirmed also the delays and as a cautious man he is he added two more weeks. 

“Greece was a small part of discussions today. The climate was rather positive. We will try to finish everything by the end of October,” Stournaras said after a meeting of euro zone finance ministers.

“There is progress in discussions with the troika (international lenders), we will try to finalize (that) as soon as possible, to be ready for final decisions at the latest by end of October,” he said.

“Final decisions” mainly concern the release of a 31 billion euro tranche from the 130-billion second bailout. A batch of money to be used for the recapitalization of the Greek banks while $6 billion will be used by the government to pay outstanding debts to the private sector.

Meanwhile, Prime Minister Antonis Samaras ‘officially’ tabled the government’s request for a program extension until 2016 through the Washington Post.

Samaras: We are asking for enough time. Instead of the 11.7 billion euro package taking place over two years, it would be best if it were to take place over four years.

Two years — up until 2014 — has been accepted by the troika. We are talking about an extension to 2016.” (Washington Post)

As talks between Greece and the Troika (IMF/EU/ECB) for the 11.5 billion euro austerity package continue, the average Costas Greek wakes up every morning under the imminent threat of a brain stroke. Leakages to the Greek press claim horrible things such as the total elimination of tax-free  income amount, working hours increase to 78 hours per week, elimination of social welfare benefits, lowering of the already lowered minimum wage and other austerity measures that together build the puzzle of the total Greek nightmare.

No wonder, Samaras told Washington Post, he is very concerned about the social cohesion of the country.

Are you concerned about potential social disorder due to the enormous difficulties the Greek people are having to endure?

There are going to be a lot of problems with social cohesion. We are already cutting down everything to the bone. Unless there is light at the end of the tunnel, then yes, I am very concerned. So we have to get light at the end of the tunnel. That’s my primary policy. And hope cannot be there unless we get the next tranche quickly so we can have recovery.

We are a pivotal part of the European Union. Any destabilization of Greece would totally rock the boat. I wake up every morning and say, “Has anything happened to Syria today?” If something happens in Syria, thousands of people would be flowing into Greece. Illegal immigrants are already a very big problem for us. We are already taking big steps to disallow illegal immigrants from coming in. Imagine if that number is multiplied by 10.

If Samaras nightmare are the Syrian immigrants, his citizens’ nightmare is how to make ends meet with a decreased income until the end of the month.