Greece Plots The Way Out

ATHENS – Caught between the political opposition and an angry electorate, Prime Minister Antonis Samaras is gambling that he can pull off an early exit from deals with international lenders.

Samaras, keen to avoid asking for more money – and to avoid austerity measures – is hoping that Greece’s seeming recovery on the horizon will be big enough so that the government can raise enough money in the markets to get out from under the terms of rescue packages with the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).

In an analysis of his gambit, Reuters wrote that Samaras “desperately needs a new narrative to get the backing of lawmakers in a crucial presidential vote next year and rally Greeks fed up with four years of austerity.

“It is a gamble with high stakes for the Greek economy and Athens’ relations with its Eurozone peers. Failure by Samaras to get his Presidential nominee elected would trigger new polls that his anti-austerity rivals would almost certainly win.”

Samaras, meeting German Chancellor Angela Merkel in Berlin earlier in the week, told her that Greece wants to try to get back on its own feet without the Troika as most of the rescue monies are running out anyway.

Only the IMF would continue to further installments but Samaras is betting Greece can do without the 11 billion euros and raise the money another way.

In Berlin earlier this week, Samaras for the first time publicly acknowledged that Athens hoped to wean itself off a 240-billion-euro ($305-billion) EU/IMF aid package a year before its scheduled end in early 2016.

He offered no details, but Athens is calculating that declaring an end to the reviled bailout could be just the political game-changer it needs, with the end of bailout funding from the European Union in December offering a logical moment to seal the exit of the International Monetary Fund as well, Reuters said.

“It makes political sense, completely 100 percent,” a source familiar with the discussions said. “The IMF is not pushing to leave, the government is pushing for it.”

Four years of austerity have produced a primary budget surplus, Greece has successfully tapped debt markets twice this year and its economy is set to grow in 2014 after a six-year recession.

Samaras is also hoping to convince the Troika to provide debt relief in some form, particularly lower interest and a longer time to repay but hasn’t ruled out a so-called “haircut,” in which Greece would walk away from a large chunk of what it owes.

That would force taxpayers in the other 17 Eurozone countries to pay the cost of wild Greek overspending and runaway patronage, politically unpalatable, especially for Germany which is putting up much of the loan monies.

Indeed in Berlin this week Samaras took pains to say an exit by the IMF would not be a “divorce” but rather, “a success.”

He needs to do something because the major opposition Coalition of the Radical Left (SYRIZA) hopes to block the election of a Greek President in February, 2015. New Democracy and its partner the PASOK Socialists have only 154 votes in the 300-member Parliament and need 180 to get their man elected. Failure to do so would trigger early elections.

SYRIZA would likely win, according to polls which show its lead between 2-6 points, pulling away from a series of ties with New Democracy.

“The government is now playing all its cards in an effort to get the 180 deputies it needs … to stay in power,” political analyst John Loulis told Reuters. “But there is a sense of political instability and a government that is wearing out.”