Eurogroup meetings, Institutions meetings, Euro Leaders meetings. Monday’s race between Greece and the creditors ended … early Tuesday without a deal. But with a perspective for a deal. And a bombastic package of austerity measures worth 8 billion euro for 2015 and 2016.
Three Shades of Grey – The Grey Eminence?
The exhausted Euro Leaders exited the summit with statements one could hardly understand what was the real substance behind. Chancellor Merkel for example spoke of “new Greek proposals that were a good starting point for further discussions”, while she claimed that they did not know “if Greek debt sustainable” despite the 5 months of negotiations.
IMF’s Lagarde repeated the usual “A lot of work has still to be done.”
Others said that a deal has to be reached in the next 48 hours.
EC’ Juncker: “I’m convinced that we will find an agreement this week, for the simple reason that we have to find an agreement this week. It’s not the right moment to discuss debt relief.”
Germany’s Merkel also tried to sidestep the crucial issue of debt relief and told reporters after the summit: “We will now that the Greek debt is sustainable, we will know more on Wednesday night.” She stressed that “No further credits can be extended until the second bailout terms are complied with.”
France’s Hollande said also that “extension of bailout programe, debt restructuring will only come at a second stage.”
At the end of the Euro gibberish it was suggested that Greece’s creditors had found the additional proposals as a basis for a discussion that should continue with a Eurogroup meeting on Wednesday and another Euro Leaders Summit on Thursday. Target is an “austerity for cash” deal this week and thus before the June 30th when Greece is expected to pay €1.2 billion to the IMF. The two sides have still to agree on several issues and creditors expect to demand more “austerity measures” from Greece.
The creditors made it clear that the Greek government has to pass the deal through the Greek parliament first and then be allowed to receive the life-saving bailout money: 7.2 billion euro bailout tranche.
The Greek proposal leaked to the press on Monday literally shocked every Greek and especially the SYRIZA lawmakers and its junior coalition partner Independent Greeks.
Two SYRIZA MPs said that they will not vote for the austerity package respectively for the deal. Mitropoulos is well known for his “populist” and Michelogiannakis.. well.. he is known for having started a hunger strike in solidarity with Syrian refugees and in the breaks he went for a coffee.
“My personal view is that these measures cannot be voted, they are extreme and antisocial,” said Syriza MP and vice president of the Greek parliament, Alexis Mitropoulos.
“An agreement based on the Greek government’s proposals is a tombstone for Greece, and will not pass from Syriza [party bodies],” said Syriza MP Giannis Michelogiannakis.
Communist Tendency, a far-left faction within Syriza, issued a statement urging Syriza MPs to vote against the agreement. (via euractiv.com)
From the Independent Greeks front it has been said that the “Value Added Tax on the islands was a “red line and casus belli.” However this issue has not been fixed yet in Brussels.
Government spokesman Gavriil Sakellaridis said that if the deal will not receive the government majority votes then “only option is elections.”
However it is too early judge about the voting. Sakellaridis said that “the deal” has to be brought to the Parliament before the end of the week, so that lawmakers be informed.
A voting could take place on Sunday.
Some of the revenue increasing measures are “tough” and include V.A.T and tax hikes as well as reductions in net income for pensioners and employees.
Some SYRIZA MP like Nikos Filis said last night in an effort to justify the measures that “there are not pension cuts”. But increasing the health care contribution and the VAT in food will effectively leave thousands of low-pensioners with less money available.
Anyway, the VAT issue is been expected to be taken up at Wednesday’s Eurogroup.
Another issue at the focus of criticism in the media today is the increase of contributions in social security. Employers complain that the increase will put obstacles to hire personnel.
Meanwhile, the ECB increased the Emergency Liquidity Assistance to the Greek banks on Tuesday morning. On Monday Mαrio Draghi reportedly told Alexis Tsipras during a face to face meeting that “the Greek banking system is safe with Greece in the program”. The program ends on June 30th 2015.
To conclude: There is no deal but an outline of a deal. Greek Prime Minister Alexis Tsipras could hardly accept more austerity measures. After the Euro Summit, he told reporters: “We want a substantial and viable solution” and “The ball is in the court of the European leadership.”
What will happen if creditors demand more measures and Greece reject them? then the ball is indeed in Merkel’s court, as Tsipras has hinted before the Euro Summit.
Suprisingly NOT is that the negotiations do not take into acocunt real structural reforms to overhaul the notorious handicaps of the Greek operating system but instead they focus on pour revenue increasing measures.
This beautiful kitten expresses Greeks puzzling about the Euro Summit and the negotiations progress.
It was posted on Twitter by @TribeofMa with the hint “errr…. umm… yeah“.