Two days ago, I posted a question: why the EU-partners did not support Samaras coalition government. Today Reuters comes to confirm my suspicion. That the EU-partners together with the International Monetary Fund literally pulled the carpet under Samaras’ feet by asking more austerity measures: “IMF and EU officials insisted on extra cuts or revenues in the 2015 budget.” Had PM Samaras accepted this “it would mean political suicide,” an official who participated in the negotiations told Reuters. And he claimed that the lenders did not want to give the bailout final disbursement of 7 billion euro to Greece, if an anti-austerity government (SYRIZA) would take over. Of course, if you’re part of the government negotiation team, you always end a discussion by blaming SYRIZA…. lol
Reuters: An impasse in Paris, a gamble in Athens: how Greece returned to crisis
“The collapse of talks in Paris on November 26th 2014 set off a month-long sequence of events leading to elections next week and proving Greece is still the region’s weak link.
At the tense meeting with Greek cabinet members to discuss exiting the four-year 240 billion euro aid package in December, a year early, International Monetary Fund and European Union officials insisted on extra cuts or revenues in the 2015 budget, according to people present.
Greek officials balked. The conservative-led government of Prime Minister Antonis Samaras had already imposed salary freezes, layoffs and special taxes. Any more austerity would be political suicide.
“They were giving us the impression that no matter what we did, they would not conclude the review,” one Greek official said on condition of anonymity because of the confidential nature of discussions between Athens and its lenders.
“After that Paris meeting, we knew it was over.”
EU and IMF spokespeople declined to comment for this story.
For the lenders, it would make little sense to declare the aid program a success and disburse the final tranche of over 7 billion euros in aid if an anti-bailout government was soon set to take power and abandon the pledges made so far.
But for Samaras, failing to exit the deal early, as he had promised, left him without a weapon to win over lawmakers in the February vote. It also weakened him in the eyes of the electorate, driving voters into the arms of the Syriza party. (full article)
However this is only part of the truth. On December 6th, the online edition of newspaper To Vima uploaded the e-mail of Finance Minister Gkikas Chardouvelis sent to Troika on December 6th offering a package of measures worth 980 million euro. The Troika demanded more measures in order to fill the budget gap. the Troika had estimated that the gap was 2.5 billion euro.
Among the measures the Greek side proposed were:
Value Added Tax increases in food, electricity, medicine, tickets, newspapers
V.A.T. increases in hotels from 6% to 13%
scraping the 30% reduction in solidarity tax
scraping the poverty allowance (EKAS) and other allowances and benefits
increasing of social insurance stamps to grant pension right
hikes in tax for alcohol drinks and cigarettes as of 1.1.12015
…and many more (via Left.gr)
So an approach to the truth is that the EU and the IMF knew very well that PM Samaras cannot apply much more austerity measures and that he would lose the President election in February.
The freezing of negotiations served also Samaras. Then had the presidential election taken place in February, Troika-Greece review would have been concluded in January and Samaras would lose both the presidential elections and the parliament elections in March because the additional austerity package would have been made public.
It was a one-way street ending in deadlock, anyway.
Therefore I am still wondering why the lenders now make statements in support of Samaras. How can I be so naive? They do not support Samaras and its bailout commitments. They only support the austerity program. With experiment in Greece’s lab continues….
An interesting approach to my posted question was made here:
“While the EU may have wanted to continue to support Samaras and the status quo, I feel it is the IMF which has forced their hand with its less political and more economical judgement on the viability of more loans to Greece.” (giveashite.com)
PS and we live happily ever after seeking the truth…