Galery

1

Anastasia Balezdrova

The firm refusal of the European Central Bank to provide liquidity to the Greek economy, unless Athens completes the monitoring of the current bailout programme and reaches a new agreement with its lenders, provoked confusion and reactions among the government.

As the Bank cut the hopes that it could allow Greece to issue new government bonds in order to secure funding for the coming weeks, now all expectations are focused on the Eurogroup meeting on Monday at which Minister of Finance Yanis Varoufakis will present a package of six specific proposals for reforms in order to achieve the completion of the monitoring of the rescue programme. Athens thus aims to obtain at least part of the last tranche under the programme that amounts to 7.2 billion euro.

On the domestic political scene, however, the government continues to insist that the lenders are not fair to Greece. Deputy Prime Minister and one of the people in charge of the economic policy of the cabinet Yannis Dragasakis said that the statements by the President of the European Central Bank did not reflect the agreement reached at the Eurogroup meeting on 20 February. He insisted that it was the result of hard work and the government was expecting its results. Dragasakis added that the current negotiations with the lenders were focused on specifying the reforms stipulated in the document and that part of this "specification" would be presented at the next Eurogroup meeting on Monday.

At the same time, president of parliament Zoe Konstantopoulou urged SYRIZA MPs to oppose the agreement.

"SYRIZA parliamentary group will not accept the failure of keeping the election promises of the party," she said in an interview for the magazine Unfollow. The context of her statement made it clear that the government partner of the radical left, the Independent Greeks party, would not support the agreement either.

"The political forces that support the government do not intend to rename meat flesh," and they "will not depart from the principles on the basis of which they have received the vote of the electorate."

Konstantopoulou described the agreement with the Eurogroup as "a combination of letters and communiqués" and was adamant that "Parliament votes neither letters nor communiqués."

Hardening of positions is apparent in Brussels as well, shortly before the meeting of the euro zone finance ministers. Indicative is the fact that, according to a publication in the German Süddeutsche Zeitung, European Commission President Jean-Claude Juncker had responded negatively to the request of Greek Prime Minister Alexis Tsipras to meet prior to the extraordinary meeting. At the end of the phone conversation, the two decided to wait until Monday and then subsequently schedule their meeting.

An unnamed representative of the European Commission confirmed that Juncker and Tsipras were "in constant telephone contact", not specifying the dates of the calls.

Earlier today, the Governor of the Bank of Greece, Yannis Stournaras, had met with Alexis Tsipras to inform him of the results of yesterday's meeting of the Governing Council of the European Central Bank. After the meeting, he said the Prime Minister and the Deputy Prime Minister had assured him that they were working hard for a successful outcome of the Eurogroup meeting on Monday.

Stournaras stressed that the Bank of Greece supported the efforts of the government, but always within the framework of the European treaties and agreements. The Greek top banker added that Greek banks had sufficient capital, their liquidity was guaranteed and deposits were not threatened in any way.

According to sources cited by the Greek newspaper Ethnos, the reform package that Varoufakis will present to his colleagues in the euro zone on Monday includes measures intended to fill the state funds in the short term. These include tax reductions for those citizens who submit their tax returns earlier than mid-year and a reduction of the interest rates on outstanding debts to the tax authorities for those who pay them by the end of March.

Even in this way, the government will hardly manage to provide the funds required for the payment of its obligations in the coming months and the lenders will continue to press it, providing funding bit by bit, as stated by analysts.

This is the opinion of associate professor of economics at the University of Athens Nikolaos Haritakis according to whom, during the years of crisis, the euro zone has built a defence mechanism against such shocks in the future and "states that do not observe the rules will be forced to start doing so."

In his lecture at the Institute of Diplomacy and Global Affairs, he said that despite the rhetoric of the cabinet in Greece, it would be forced to comply with what is stipulated in the agreement of 20 February, which was signed by the Minister of Finance.

According to Haritakis, SYRIZA would gradually part with its far-left wing as well as with its current government partner, Independent Greeks. "This government will allow the country to realise that the situation in Europe is not opposing the North against the South, there are no winners and losers, but we ourselves must build a dynamically developing society," he said.

In his words, the European Union does not aim at driving Greece out of the euro zone, but its pressure will force the country to start fulfilling the commitments it has undertaken by signing the agreement.

Without specifying if and when he expects new elections, Haritakis said that the next Greek government would be centre-left and it would fully implement the measures stipulated in the agreement of 20 February.