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EU Plans Loan-Agreement Concessions to New Greek Government?

Concessions? What concessions?  Several international newspapers have been reporting about it in the very last days before the crucial June 17 elections. Is it true that the EU wants to make concessions in the bailout terms or is it just another  ‘leakage’ aiming to convince Greeks to cast their votes for the ‘right’ – read: ‘pro-bailout’ – parties like Nea Dimocratia and PASOK?  Greeks are under a massive attack of doomsday scenarios that can be summarized in one single sentence: the world destiny is in the hands of Greeks – especially in the hands of the Tsipras’s voters. In the hands of a little bit more than 2 million voters…. I can’t help but be eternally impressed…

EU plans to offer concessions to new Greek government

Many of the papers report on speculation over how this weekend’s elections in Greece will affect how Athens negotiates the terms of its international bailout.

According to the FT, the EU is prepared to present a package of incentives to try to convince a new Greek government to honour the terms of its bailout.

The paper says the offer would include reduced interest rates and an extended payment period for bailout loans, as well European Investment Bank funds to boost Greek public works programmes.

The Wall Street Journal reports that EU officials are concerned by the rise of radical left party Syriza, which secured second place in the last elections.

The group’s leader Alexis Tsipras has pledged to tear up Athens’ bailout agreement, but keep Greece in the eurozone.

Tsipras has made it clear that he believes German chancellor Angela Merkel’s threats to suspend Greece’s funding if the country breaches its rescue terms are a bluff, saying EU leaders are too committed to maintaining the eurozone not to make concessions, says the paper.

The Irish Times says Spanish borrowing costs also rose to record levels yesterday, undermining the country’s bailout programme and worsening the debt crisis, as Europe awaits the results of the Greek elections.

According to the paper, expected fallout from the Greek polls is likely to put EU leaders under extreme pressure as they battle to tackle severe market disruption and loss of faith in the eurozone.

However on Friday noon the German Finance Ministry ruled out any relaxation of the requirements for Greece for the time being.

Spokesman of Finance Minister Wolfgang Schäuble (CDU), Martin Kotthaus said during a press conference that the German FinMin is adhered to the agreed program Greece. “The program as it is designed is the right one to Greece to take on a sustainable path.” When an efficient government is established after the elections the Troika of the European Commission, European Central Bank and the International Monetary Fund will  travel to Greece to discuss the disbursement of funds, Kotthaus announced. (source: Finanzen)

PS hopefully EU-designers have a plan B that includes a full list of the planned concessions, which they can promote via TV-spots and newspapers ads. Just in case Greece would head to a third round of elections. I give it a 5% chance, but you never know….


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One comment

  1. Feels nice doesn’t not to have the American voters for once determining your fate eh?