Editorial: The major cost of a potential agreement
If we want to see the positive side of Monday evening’s Eurogroup it appears that there is a preliminary agreement to close the…
If we want to see the positive side of Monday evening’s Eurogroup it appears that there is a preliminary agreement to close the bailout review on the 24th of May. If this development is confirmed, it will at least put an end to the uncertainty that has prevailed in recent weeks and undermined the economy. From then on, despite the government celebrations, it is clear that difficulties lie ahead of us.
The infamous contingency measures, for which the government was supposedly struggling to oppose, were replaced by a precautionary budget expense cutting mechanism. This mechanism will bring cuts across the board without the government even having the discreet option of choosing what measures to introduce. As confirmed by Mr. Tsakalotos, only defense and social welfare will be exempt.
So the government raised its banners of resistance, as usual, delayed in singing the agreement, in order to embarrassingly accept what the creditors demanded from the start. The argument presented after-the-fact is that this mechanism will not come into effect because the bailout goals will be met.
This is where the hardship begins. Any delays or ministers resisting the implementation of any of the agreed-upon measures will be followed by much harder and painful interventions. As for the debt, which will be debate in three stages, we are a far way from securing any significant relief. Based on the usual European practice of bridging differences, the talks will take place n the future, based on circumstances.
What is certain is that once again the Greek people are called to pay for the government’s political and administrative shortcomings. This additional set of measures will make their life more difficult, should the government majority turn out to be unable or unwilling (for its usual obsessive reasons) to implement what it has agreed to.