Eurozone Finance Ministers Delay Greek Bailout

(photo: NickWinslow/wikimedia)

Greece has agreed to new bailout terms, with brutal austerity measures attached, but Eurozone finance ministers don’t believe the Greeks will follow through, so they’ve held up the provision of the funding.

With the clock ticking on a possible sovereign debt default by Athens within weeks, eurozone finance ministers postponed a decision on Greece’s rescue until next week, piling the pressure on the Papademos government.

Following weeks of brinkmanship that have poisoned relations between the bankrupt country and its eurozone creditors, the ministers and senior officials from the eurogroup, the European central bank, the European commission, and the International Monetary Fund voiced exasperation with Greek delaying tactics.

The meeting in Brussels declined to activate the bailout to prevent an outright Greek insolvency by the end of March when the country has to redeem more than €14bn in debt.

The Greek finance minister, Evangelos Venizelos, left the Brussels meeting reportedly stating that his country now needed to decide whether or not to remain in the single currency.

That’s a new statement from a Greek official.

This looks like a kind of dance, where Greeks agree to unworkable terms with unenforceable rules. The finance ministers are supposed to shut up and go along, and then get all surprised when nothing works out later, leading to another round of discussions and deals. That’s how it’s worked for the past couple years. I don’t know if this delay is more of the same, just positioning, or if the finance ministers have had enough with Greece, or if they are so dead-set on destroying the Greek population that they want total assurance of that fact. The claim is that there is still a funding gap of €325 million. Greek leaders objected to the supplemental pension cuts in the original deal which could account for that. So the finance ministers want to see “results” before they sign on.

That could mean action in the Greek Parliament. And that means walking into this:

Clashes between police and protesters broke out in Athens on Friday, a day after Greek leaders agreed to deep austerity cuts in a last-ditch bid to keep their country from going bankrupt.

The nation’s leaders have said that they believe many of the measures will worsen an already harsh recession, but the country’s lenders have demanded cuts in exchange for an international bailout, the second in less than two years. And though Greeks wonder if they can tolerate more pain, some European leaders have said that the country needs to slash spending even more.

In Greece on Friday, the fallout from the deal shook the political establishment and society as a whole, although few expected a serious challenge to passage of the new measures. The head of a junior partner in Greece’s coalition government, George Karatzaferis, said Friday that his right-wing LAOS party would vote against the austerity measures on Sunday. On Thursday, the deputy labor minister, Yiannis Koutsoukos, a Socialist, resigned, saying that the cuts would do far too much to hurt Greek society.

We’ve heard grumbling like this before. But presumably there is some breaking point when the gap between the people and their government is this large. No?

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