Greece Flip-Flops Again, Bailout Monies Release Now Uncertain

ATHENS – Reversing course after reneging on anti-austerity promises, Greece’s coalition government now doesn’t want to implement some of the changes it agreed with international creditors, putting the release of bailout funds in limbo.

Greece and the Quartet of the European Union-International Monetary Fund-European Central Bank-European Stability Mechanism (EU-IMF-ECB-ESM) came to terms on more reforms leading to the scheduled disbursement of 10.3 billion euros ($11.46 billion.)

That was part of a third rescue package of 86 billion euros ($95.68) that Prime Minister and Radical Left SYRIZA leader Alexis Tsipras sought and accepted after saying he would do neither, and which led to more crushing measures he vowed to reject but accepted.

Now, however, with polls showing 86.5 percent of Greeks, including many in his hard-core ranks, disapprove of what he did, Tsipras is trying to pull back on the deal, especially over pension cuts and letting banks chase debtors who can’t pay because of big pay cuts, tax hikes, slashed pensions, and worker firings.

At the same time, the banks aren’t pursuing the former ruling New Democracy Conservatives and PASOK Anti-Socialists who owe 250 million euros ($278.27 million) and aren’t paying.

The bank officers who approved the loans without sufficient collateral were given immunity from prosecution.

EU officials said Greece would have to abide by the memorandum that was signed that provided for the cuts Tsipras wanted but no longer wants but he still wants the money.

Finance Minister Euclid Tsakalotos wrote to the European Commission and IMF that their demands could not be met and that Greece didn’t want to implement the terms of the deal it had signed.

Tsakalotos also said Greece won’t – after saying it would – privatize ADMIE, the country’s electric operator nor freeze the wages of the Coast Guard and police, Kathimerini said.

Greece, however, needs the bailout monies as only about 22 billion euros ($24.49 billion) of the 86 billion had been disbursed since the deal was first agreed in August last year.

After that, Tsipras didn’t want to impose austerity and negotiations dragged on until he caved in again as he did before after setting Red Lines he stepped over.

Without the new monies – almost of which goes back to banks and the creditors and not Greek society – Greece will default on loans in July, as it did last to the IMF only to be rescued again with more loans.

Kathimerini said Tsipras might go back to the Parliament narrowly controlled by his coalition with the tiny, pro-austerity, far-right jingoistic Independent Greeks (ANEL) to change some of the terms to which he had already agreed, which could jeopardize the release of more funds.

German Finance Minister Wolfgang Schaeuble loves chiding Greece
German Finance Minister Wolfgang Schaeuble loves chiding Greece

German Finance Minister Wolfgang Schaeuble, whose country is putting up much of the bailout monies and insisted on the harsh terms decimating the lives of scores of thousands of Greeks, said however that Tsipras’ decision to raise taxes across the board instead of cutting speding was “economic foolishness,” the paper said.

Still, he said austerity is the only way to save Greece even if it ruins the lives of so many people in the doing.

“This is why Greece needs an effective public administration,” Schaeuble told a conference on fiscal sustainability, saying the country, notorious for not collecting taxes, has to do that or never recover.

New Democracy Conservative leader Kyriakos Mitsotakis met in Strasbourg, France with German Chancellor Angela Merkel, the paper said, and told her if he comes to power he could reach a primary surplus of 2 percent of Gross Domestic Product (GDP) and 4 percent growth in 2018.

The EU leaders want a primary surplus – which doesn’t include interest on debt, the cost of running cities, towns, state enterprises, the military or social security – of 3.5 percent of GDP and many analysts doubt Greece can show growth in two years with tax revenues far off target and the economy still shrinking.