Greece expects to submit a more complete list of reforms in order to free up funds so the country can service its obligations. Four times the Greek government has provided lists and four times the European group of finance minister rejected it.
Greece avoided a default in the first week of April 2015 when it successfully paid 450 million euros to the IMF. However, the coming weeks see several more loan repayments, each costing hundreds of millions of euros. This leaves other nations concerned that Greece may begin defaulting on its loans, and has led other members of the Eurozone to call for the cash-strapped nation’s withdrawal from the group.
With another impending international debt deadline, Greece runs the risk of becoming the first OECD country to default on its obligations to the IMF. The country owes €448m – and many are once again raising the “spectre of Grexit” idea, accompanied by damning commentary on Greece’s failure to get successfully through the crisis.
Greece’s bailout extension expires in May this year and its inclination towards the members of BRICS seems inevitable. For long, Greece’s economy has been bringing troubling news to the Eurozone. The EU members have time and again tried their best to keep Greece in the common currency zone but bailouts and downgrading has got the worse out of Greece. With high unemployment rate, around 60% of Greek population (under 25) still remains unemployed.
There is a legal concept called “odious debts” that is traceable back more than a century. The US helped create a precedent for it by denying Cuba’s responsibility for the debt incurred under Spanish colonial rule. The concept took on added significance in the post-colonial era more broadly.
More Europeans are accusing finance ministers of blackmailing Greece, leading to suspicion that Germany is pressuring the country to cut welfare spending on its poorest citizens so that it can borrow more debt from the European Central Bank.
As Greece prepares to go head to head with Germany again in a bid to settle rancorous talks over its debt burden and austerity policies, it can all sometimes seem like an elaborate game of chess. The media’s perception of one of Greece’s key negotiators heightens that feeling; finance minister Yanis Varoufakis, as an academic “game theorist” who really should have a crucial advantage over his adversaries in the cut and thrust of negotiations.
Technical talks between Greece and its official creditors have bogged down. The purpose of the talks is for the creditors to have a better understanding of the true financial conditions of Greece in light of the disruption caused the election and the subsequent political uncertainty. Tax collection suffered. Economic activity slowed. Deposits have left the banks.
In the 1980s and 1990s, there was a split in the Green Party in Germany. The fundis were very principled and doctrinaire. The realos were more interested in sharing power to shape policy. For them, unlike the fundis, political expediency need not be a crime.
Arguably, all significant political movements have a similar split. In any event, this split seems to be hobbling Syriza, which faced an arduous task in any event.
The world breathed a sigh of relief when Greece accepted a four-month extension to its current bailout programme on February 20. After much political rhetoric to the contrary, newly-elected Syriza promised to continue with reforms. The deal is such that the vital last injection of cash that is propping up its economy – worth €7.2 billion – will only be delivered when these reforms are in action.
