From the Guardian, and it may or not be so: ‘Athens accepts harsh austerity as bailout deal nears; Greek cabinet reportedly backs a package of reforms and spending cuts worth €13bn to secure third bailout and modest debt writeoff
‘Reportedly’, mind you.
“Athens is understood (my emphases throughout) to have put forward a package of reforms and public spending cuts worth €13bn (£9.3bn) to secure a third bailout from creditors that could raise $50bn and allow it to stay inside the currency union.
A cabinet meeting signed off the reform package after ministers agreed that the dire state of the economy and the debilitating closure of the country’s banks meant it had no option but to agree to almost all the creditors terms.
Parliament is expected to endorse the package after a frantic few days of negotiation that followed a landmark referendum last Sunday in which Greek voters backed the radical leftist Syriza government’s call for debt relief.
Syriza, which is in coalition with the rightwing populist Independent party, is expected to meet huge opposition from within its own ranks and from trade unions and youth groups that viewed the referendum as a vote against any austerity.
Panagiotis Lafazanis, the energy minister and influential hard-leftist, who on Wednesday welcomed a deal for a new €2bn gas pipeline from Russia, has ruled out a new tough austerity package.
Lafazanis represents around 70 Syriza MPs who have previously taken a hard line against further austerity measures and could yet wreck any top-level agreement.
Emphasising the likelihood of further strife in Greece next week even should a deal be concluded, Brussels officials talked privately of plans to fly in humanitarian aid such as food parcels and medicines to major cities.
The urgency of Greek efforts to prevent an exit from the euro came after Brussels set a midnight Thursday deadline for Greece to produce a package of measures in line with previous demands.
With the support of officials from the French finance ministry, Greek negotiators are believed to have accepted the need for VAT rises and rules blocking early retirement as the price of a deal.”
Now this steep may indeed be another gambit on the chessboard, given some statements by the Titans of Finance seeming a bit more beneficent than earlier, for instance Tusk:
“Donald Tusk, who chairs the EU summits, said European officials would make an effort to address Greece’s key request for a debt write-off.
“The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation,” Tusk said.” (read more here)
Earlier reports at the Guardian noted that
Greece may get bailout and humanitarian aid
“International observers have been telling us today that the package is likely to be so punitive that humanitarian aid cannot be ruled out.
EU president Jean Claude Juncker had mentioned humanitarian aid as part of the “detailed Grexit scenario” plans creditors had drawn up. EU diplomats based in Athens said some form of assistance is likely to be given even if am agreement between Greece its creditors is reached.
Syriza MPs have been telling our Helena Smith that the big no received in the referendum on Sunday was a “confidence vote” in Tsipras who like no other prime minister before now has the popular support to enforce such punitive measures.
That is not how the far far left (or indeed the far left in Syriza) see things. Strikes, rallies and protests should be expected in weeks ahead.”
The banks are reportedly almost out of euros for the ATMs, the Troika cut off all emergency liquidity funds. Euclid Tsakalotos apparently said that he’d finalized and submitted a plan of reforms for a third bailout to give creditors time to review it ahead of a summit of EU members on Sunday.
Herr Schauble is quoted as saying that there just ain’t much wiggle room on restructuring debt. The authors of the article did mention that interest rates could be lower on the new debt, with a longer repayment schedule. Even the IMF rad mentioned twenty-four months or some such for ‘breathing space’.
Still, it’s hard to know what Alexis and Euclid are imagining in terms of what happens next. Are they counting on the hard left in Syriza to reject an eventual deal and provide cover for even the ‘temporary Grexit’ some have mentioned? I’m sure glad I don’t have to handicap this horse race.
Added on Edit:
Aha! The plot thickens: Telegraph UK: ‘Greece finally admits €2bn gas pipeline deal with Russia; Closer ties between Athens and Moscow is likely to worry the US, which has stepped up its involvement in Greece’s debt crisis
Yes, Jack Lew had advised…a not-too punative a deal.
“The move is likely to worry the US, which has stepped up its involvement in Greece’s debt talks with international creditors over fears the cash-strapped country could drop out of the single currency and come under the influence of its Cold War rival.
Panayotis Lafazanis, Greece’s energy minister, said the move would be a key part of the country’s “multi-faceted” foreign policy and would create 20,000 jobs, the Financial Times reported.
Figures released by Greece’s National Statistics Service on Thursday showed unemployment at 25.6pc in April.
Reports in April suggested Moscow was ready to provide advanced payment to Greece for the “Turkish Stream” pipeline project, which will transport 47bn cubic metres of Gazprom’s gas annualy from 2018.
Those reports were quickly denied by the Kremlin, depite Greek Prime Minister Alexis Tsipras visiting Russia to hold talks with Russian president Vladimir Putin.
During that visit to the Kremlin, Mr Tsipras insisted Greece was a “sovereign nation with the indelible right to carry out its own foreign policy”.
Germany’s finance minister, Wolfgang Schauble, has previously said he had no objection to any deal with Moscow, but that ultimately it would not “fix Greece’s reform problems”.
Beijing has also sought to invest in Greece’s port infrastructure.
Mr Lafazanis, who heads up the Left Platform of Syriza, has hailed a new dawn in Greco-Russia relations and has invited the likes of state-sponsored Gazprom to drill for oil off the Greek coast.”
(Eeek on that last one.)