It has been a tumultuous year for Greece. The nation was on the cusp of completing its second bailout, talk was of a bridging loan of €10 billion, but the administration was confident that the money could be found internally or via re-entry to the money markets. However, it was able to get its nominee for president approved, plunging the nation into elections which saw a radical left-wing coalition come to power with promises to end austerity, slash the nation’s debt by having creditors agree to write much of it off and get Germany to pay war reparations it claimed were still outstanding. The result was frustration; brinkmanship; worsening economic circumstances; a referendum; restrictions on bank withdrawals taking the banks to the brink of insolvency; and a third bailout loan hotly followed by a fresh election renewing Syriza’s mandate.
The Greek government and its people were left in no doubt that they had a stark choice between agreeing to further austerity and legislative changes or they could chose to leave the Euro and endure sovereign default and, almost certainly, a worse economic fate. An outline agreement was reached with the Eurozone for a fresh €86 billion allowing emergency funding to be paid to Greek banks.
Unsurprisingly, Greeks who voted for Syriza are frustrated. This week has seen the first general protest strike since Syriza took power. The protesters are opposed to the terms of the third bailout, but there really would seem to be no alternative if Greece is to remain in the Euro, unless it expects others to pay its bills of course.
Legislators have agreed to changes in the retirement age, removal of many early retirement benefits and ending sales tax breaks on some Greek islands, in line with EU demands. A sticking point remains over bad home loans with the government seeking assurances that would avoid repossessions, but creditors are insisting that non-performing home loans must be dealt with before a tranche of €10 billion can be released to the banking sector and a €2 billion investment package released. The appropriate expression, sadly, is “beggars can’t be choosers”; it seems that Greece has worn out the patience of its partners and has little left to bargain with.
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