After Eurogroup upset, government looks for way forward

28 January 2017
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The government is mulling the way forward after Thursday’s Eurogroup, which piled more pressure on Athens to legislate measures now for the period after 2018, when the country’s third bailout ends. And to make matters worse for the government, it is not just the International Monetary Fund that is demanding these measures, but all creditors involved in the Greek bailout, as was evident at the meeting of eurozone finance ministers.

The leftist-led coalition enters this new phase in the country’s ongoing, and seemingly unending, debt saga without the alliances it had hoped to form to reach a political solution that would break the deadlock in the negotiations to complete the second review of its third bailout.

Thursday’s Eurogroup has forced Athens to rethink, yet again, the latest road map devised by the government to complete the review, without committing to further unpopular measures.

The possibility of yet more measures is a frightening prospect for government as it would further undermine its credibility among an already disillusioned electorate.

Apart from the debate over what will happen after 2018, significant differences remain with creditors on labor, energy and the 2018 fiscal gap. Despite the government’s insistence that these differences will be relatively easy to bridge, they remain nonetheless an obstacle to the review’s conclusion, which it had hoped to wrap up by December last year.

Aides to Prime Minister Alexis Tsipras insisted on Friday, in the strongest terms, that the results of Thursday’s meeting will have no impact on his resolve to stick to his pledge last week not to legislate any measures now for the period after 2018.

If anything, the government feels buoyed by the positive results of the economy, which Finance Minister Euclid Tsakalotos said render the demand for new measures unnecessary. Nonetheless, the government is in a race against time to conclude the review by the beginning of March at the latest, which, it hopes, will pave Greece’s way to the European Central Bank’s quantitative easing program.

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