Escalating drama

The Greek drama is escalating once more as Prime Minister Antonis Samaras is set to meet with German Chancellor Angela Merkel in Berlin on Friday and French President Francois Hollande in Paris on Saturday. Histrionics is a key part of politics because leaders act in front of audiences, which in this case is the electorate.

Samaras has come full circle. From a skeptic toward — if not opponent of — the first memorandum, he is now a champion of complete fiscal adjustment through strict austerity measures. Any disquiet this causes his New Democracy MPs will be expressed when they vote on upcoming bills in Parliament.

Samaras?s main objective now is to restore his and the country?s credibility in the eyes of Merkel, firstly, and secondarily of Hollande. It is assumed that he has the support of the Greek people in this endeavor, though it remains to be seen whether this support will last once the required cutbacks are enforced.

Wednesday?s meeting with Eurogroup Chairman Jean-Claude Juncker was very positive, as was the statement made afterward by the prime minister of Luxembourg, whose philhellenic sentiment was evident. What it all hinges on now is the evaluation to be made by the troika inspectors in regard to the fiscal consolidation program that the government is due to submit and the determination that the coalition shows in the liberalization of closed professions and pushing through privatizations and other structural reforms. Only if these measures are implemented will Greece receive the next tranche of aid worth 31 billion euros and will its application for an extension to the fiscal adjustment program by two years be granted the green light.

Of course, this was also the case from the first moment that Greece sought a bailout from Europe and the International Monetary Fund, but the measures were only enforced in part, hitting wage earners and pensioners, and, by extension, commerce and business. Juncker also mentioned the need for a broader tax base, but for the past two-and-a-half years, reform of the taxation system has been carried out in a theoretical framework only.

The drama is expected to last through October, when the troika completes its deliberations and issues its decision. But, apart from the stars of the show on the European and domestic level, Greek society also needs to be convinced of the measures, because any loss of control on this front could develop into a nightmare scenario that must be avoided at all costs.

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