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Greece at Knife’s Edge – Claims, Rumors & Scenarios

The developments in Greece are dramatic and the tension has been extremely high in the last hours, after Prime Minister George Papandreou decided to cancelhis visit to USA and this in the middle of the road. He was flying Athens-Washington via London and he was in the British capital when he spoke with Finance Minister Venizelos and took the decision that spoiled the Saturday night of many debt-ridden Greeks. It triggered confusion and worries that additional austerity measures will come under Greece’s lenders pressure and/or that the country will stop paying wages and pensions.

“Things are crucial”  is the common slogan of the Greek media and news portals.

Proto Thema  goes so far to entitle its report “State of Emergency” claiming that Venizelos reported to Papandreou  about “the negative atmosphere during the ECOFIN meeting in Poland, the suspicion and even hostility of Greece’s European partners towards the country”. Further the news paper claims that the EU-partners rejected the revenues plan of the Greek government doubting the target of 1.5 billion euros through the property tax [ that triggered an fierce outrage in the society] considering the the most it can be collected is 1/3 of the target. And that they don’t intend to give the 6th bailout tranche to Greece.

Also other media – prime time news – reported similarly on the ECOFIN meeting, saying that the EU-partners insist on structural reforms and not just tax collecting measures from citizens living in deep recession. They doubted the effectiveness of just raising taxes without managing to cut efficiently and permanently state spending. Some media even claimed that Greece’s lenders want additional austerity measures.

Contrary to the other tranches, the 6th trance will be spend on wages and pensions. Greek government officials said last week that the country has money until October 15th 2011.

Will Athens proceed to payments stop? What will be the people’s reaction? Social unrest would  most likely break out, as the people have lost confidence to government’s any possible reassuring statements and announcements.

Another question is what will happen with the property levy draft bill, that is supposed to come to Parliament next week. Will governing party PASOK deputies vote for it under the heavy pressure of their voters? If not the government will break apart, and early elections would be due.

However nobody wants early elections. Neither Papandreou, because apparently is confident that he will ‘save the country’. Neither Greece’s lenders because they do not trust and do not agree with the plans of major opposition party, Nea Dimokratia  [Saturday evening ND chief Antonis Samaras asked early elections!]. Neither the citizens, because they’ve lost confidence to any political parties.

The latest scenarios speak of upcoming “massive lay-offs in the public sector” and of “early elections”.  

As I said, “claims” and “scenarios”.

PS The weather will be fair and shiny tomorrow, temperature at 34 degrees Celsius. At least, something….




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