While Greece has a 22-billion euro ($25.05 billion) cash buffer to keep operating up to June of 2020, the end of 326 billion euros ($371.27 billion) in three international bailouts on Aug. 20 still has the ruling Radical Left SYRIZA-led coalition hoping for a return to the markets, but the lenders are suspicious, the German newspaper Handelsblatt said.
With Germany being the biggest contributor to the rescue packages, the paper mocked Prime Minister Alexis Tsipras’ boast before he took office in January, 2015 that, “We’ll beat the tabor (snare drum) and the markets will dance.”
But he quickly found himself backpedaling and dancing to the tune of the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) and accepting a third rescue package, for 86 billion euros ($97.94 billion), along with more austerity measures he swore to reject but then agreed to impose.
The German paper wrote that lenders are being cautious about whether to lend money to Greece again despite the high interest rates the loans would bring, with political instability the key culprit, especially tension between SYRIZA and its junior coalition partner, the pro-austerity, marginal, jingoistic Independent Greeks (ANEL) of Defense Minister Panos Kammenos, as well as the high debt levels.
“Markets’ suspicions are primarily due to Greece itself. Alexis Tsipras can do little over the level of the debt. With his policies, however, he is increasing markets’ concern. The co-governance (coalition) with the ANEL party is ‘shaky’. As such, the prime minister risks losing the majority in Parliament in a few months … Alexis Tsipras has already started (doling out) pre-election gifts; he wants to suspend pension cuts, distribute a social dividend and roll back reforms in the labor markets: The worst-case scenario for investors,” Handelsblatt wrote.