Yesterday’s discussion in SYRIZA’s political council marked the beginning of a counter-attack by the government, which faces staunch criticism over the FYROM naming deal and the terms of Greece’s exit from the bailout memorandum.
The first step will likely be a return to the markets before the end of the bailout programme. The disbursement of the last tranche of the cash buffer that the Eurogroup approved will serve as a guarantee for many investors, at least for a five-year bond. In this manner, the government can speak of a return to the markets. The last tranche will cover financing needs for the next two years.
The main slogan of the government will be that the memorandums are over. In this, it will find willing allies in other European countries that want to reassure their electorates that they are no longer giving money to the Greeks.
Still, a large segment of Greek society understands that the formal end of memorandums does not mean an exit from austerity and surveillance. Hence, even if austerity measures are decided in Athens, they will still be austerity measures.
A central element in the government’s strategy is to convey the message that handouts are in the offing. At yesterday’s political council, some noted that there will be a 750mn euro surplus above the surplus needed for targeted interventions – mainly tax cuts.
At the annual Thessaloniki International Trade Fair in September, the PM is expected to emphasise the return to the markets, the end of the memorandums, targeted social interventions, and positive data on this year’s tourism.
However, the wear of protracted austerity, constant insecurity, and anxiety over pension cuts shows that the big problems cannot be addressed with targeted handouts.
The government hopes in some way to retract or at least postpone in some manner the pension cuts (which take effect on 1 January, 2019), which have created a political uproar.
However, that would trigger a major backlash from creditors, as they are opposed to the retraction of reforms that have already passed into law, even if the reversal is fiscally feasible.