Another Eurogroup session concluded yesterday, with the results failing to live up the expectations. The progress in the negotiations over he past couple weeks have been recognized, but it was stressed that significant efforts were required for an agreement for the current program, with running out for Greece. It should be noted it was highlighted that the financial aid would only be paid out after the Greek side begins implementing the agreed measures.
The pressure is transferred once again over to the Greek government, which amid stifling liquidity conditions, must now decide which specific measures it accepts in order to end this marathon negotiation. The talk of a referendum in the past few days has been abandoned, since it would not have any meaningful effect. The payment of the IMF installment, despite the objections of some, seems to have facilitated the discussion and averted uncontrollable side effects.
Crucially for the government and the economy, if the European Central Bank evaluates and confirms the progress that the Eurogroup recognized, then it will be called upon to decide whether to allow a breath of liquidity. Given that the case reserves are critical, any ECB decision will play a decisive role in outcome of the negotiations.
Aside from the decisions of our partners and the ECB, it is clear that the government has no more room for delays or empty threats. The economic uncertainty is getting worse every day and the consequences are becoming even more painful. The “one step forwards, two steps back” tactics which the government has observed so far cannot carry on. The Prime Minister, who has the ultimate responsibility for the country and the negotiations, must take his final decisions and assume the cost, which can be no other than to secure the country’s participation in the euro. Any other scenario will be catastrophic.
TO VIMA
