NEWS

Gov’t on ropes over ‘clean exit’

TAGS: Politics

With the government’s post-bailout narrative in dispute, its foreign policy in doubt and the recent Hellenic Space Agency debacle, speculation about early elections before the end of the year have resurfaced.

Given the possibility of early polls, the SYRIZA-led coalition is pinning its hopes on International Monetary Fund chief Christine Lagarde, in terms of Greek debt relief, and United Nations mediator Matthew Nimetz, in the name dispute with the Former Yugoslav Republic of Macedonia.

The government expects Lagarde to take a favorable position with regard to debt relief, hoping that will counter the scenario of Greece being placed under enhanced surveillance in the post-bailout era, as announced last week by Finance Minister Euclid Tsakalotos.

It is also looking to Nimetz for a deal to wrap up the decades-old name dispute, which would enhance Prime Minister Alexis Tsipras’s standing on the domestic front.
According to sources – and contrary to the rhetoric of recent months – the government’s desired scenario is for the IMF to remain “symbolically” in the Greek bailout program.

This could happen if the European Stability Mechanism buys a part of the debt owed to the IMF. This would allow the Washington-based agency to remain in the program but without a substantial and interventionist role in the post-bailout era – as its involvement in the country’s economy will be limited. It is thought the IMF having a relatively symbolic role in the program would relieve pressure from Germany, which, it is hoped, would ease its strict demands in terms of reforms. 

At the same time, Athens reckons the IMF would have no more demands for additional measures.

Moreover, keeping the Fund on board should mean more generous debt relief measures, which would serve as a counter to the strict supervision that Germany appears determined Greece be subject to after the bailout ends in August.

Tsipras is also said to be frantically seeking a deal in the name dispute with Skopje and banking on the fact that Nimetz has begun to press FYROM to change its constitution – a key sticking point in the negotiations.

Resolving the seemingly intractable dispute would boost the government’s foreign policy credentials, which have been disputed by opposition parties, especially New Democracy.

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