Slowly but gradually it looks as if some try to digest the idea of left-wing SYRIZA winning the next elections in Greece and forming the government. European Commision Vice President Jyrki Katainen, for example, said that the EU executive “will respect democracy and is ready to cooperate with any government in Greece”. Katianen made this statement after the first round of voting for the country’s next president failed on Wednesday evening.
The German Parliament approved on Thursday, the two month extension for the Greek bailout program. Finance Minister Wolfgang Schaeuble said that “Greece is in better shape than most would have thought in the past few years” that “the efforts (…) begin tp pay off for the people of Greece,” and urged that “Athens implements further reforms as agreed”
Bloomberg wrote a sober report about SYRIZA’s program on Greece’s Public Debt, Fiscal Policy and Relations with the EU.
Greek Public Debt
Syriza says Greece’s 322 billion euros ($397 billion) of public debt is not sustainable and the target set by the troika of creditors — the European Commission, the International Monetary Fund and the ECB — is unattainable. The party also says austerity suppresses growth and exacerbates debt sustainability.
Syriza’s head of economic policy, John Milios, 62, said that if the party assumes office, it will fully repay and service debt owed to private investors. Milios also said Syriza expects to have good relations with bond investors and the negotiation on repayment terms of debt owed to euro members won’t put Greece on a collision course with its partners.
Tsipras has said Syriza will follow prudent fiscal policy, without running a budget deficit. Syriza’s commitments will be achieved in “conditions of budgetary balance,” Tsipras said in a Dec. 2 speech in Athens.
If Syriza forms a government, it will immediately unveil a “non-negotiable” social spending program, Milios said. The program for the “medium term” will cost about 11.6 billion euros and come from funds within the country, such as improving tax collection and won’t require additional borrowing.
Tsipras said the program will ease Greece’s “humanitarian crisis.” It includes subsidized electricity and food stamps for 300,000 Greek households living below the poverty line, free health care for unemployed Greeks, subsidized transport and a Christmas bonus on pensions below 700 euros a month.
Syriza plans to achieve the targets without extra borrowing because after a writedown on debt, Greece will not need to sustain such a high primary budget surplus. Also, increased social spending and a new private-debt restructuring financed by the bailout loans originally earmarked for banks will boost consumer demand and economic growth, it says.
In an effort to calm down the markets and the country’s lenders and dash investors’ fears SYRIZA MEP and EU Parliament Vice President Dimitris Papadimoulis reitated SYRIZA’s commitement to the Eurozone and decisively ruled out the “Grexit” option.
Below some excerpt from Papadimoulis exclusive interview to EurActive:
“There is absolutely no case for a Grexit. Those who invoke such a possibility play a propaganda game against the Greek and European economy.” Papadimoulis said.
He added that the actual danger for Greece is its social disintegration and its transformation intoto a “debt colony” and for Europe, a new phase of recession, higher unemployment and poverty.
In an attempt to appease international lenders and possible investors’ fears, Papadimoulis made it clear that there is no Syriza party member who speaks in favour of returning to the drachma.
“All our members respect the party’s decisions which are pretty clear… We will seek a solution for Greece within the eurozone,” he stated, blaming a significant part of the Greek press for badmouthing his party’s policies.” (full interview here)
Even the Athens Stock Exchange did not fall and limit some losses. Yet it is +0.08% from +1.73% in the opening of the session in the morning.
However the question of whether SYRIZa will manage to form a government of itsown or will need to form a coalition is still open. You can never know what will happen in this country. Not so much in advance….
PS …and we will live happily ever after…