Tsipras pins hopes on debt relief

Tsipras pins hopes on debt relief

In the aftermath of the “breakthrough” at the Malta Eurogroup last Friday, Prime Minister Alexis Tsipras will have his eyes on Monday's meeting about Greece’s debt between German Chancellor Angela Merkel and the head of the International Monetary Fund, Christine Lagarde.

Given the opposition emanating from within ruling SYRIZA over the concessions the government will make as part of the conclusion of the second review of the country’s third bailout to receive much need bailout loan tranches, Tsipras hopes that progress on Greece’s key demand of debt relief may sweeten the pill.

The government has, at least for now, said it will legislate measures for the years 2019 and 2020 as long as there is progress in debt relief.

Moreover, as it is lagging in the polls and under increasing pressure from within, the leftist-led coalition is banking on a deal on the Greek debt by the Eurogroup on May 22, which will also pave the way for Greece to join the European Central Bank’s quantitative easing program (QE). According to the government, this is the only way the deal will become acceptable to the naysayers.

But opposition party members with knowledge of the bailout negotiations are not necessarily buying into the government’s narrative.Instead, they are not ruling out a scenario whereby Athens will receive a new round of promises about debt relief but the parts of the agreement regarding Greece’s participation in the QE program, and the IMF’s contribution, will be deferred to October, after German national elections.

However, what is clear after last Friday’s Eurogroup is that if Tsipras does indeed convince the parliamentary groups of SYRIZA and junior partner Independent Greeks (ANEL) to vote through the measures agreed with creditors, then the prospect of early elections will become more remote. Analysts have been quick to note that the government is buying time, at least until the summer of 2018.

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