A sizzling September

This is going to be one sizzling September. Society and the political leadership are going to be put through the wringer once again, and no one can predict the outcome. The troika is insisting on further cutbacks to pensions and public sector salaries, state workers being fired rather than being put on labor reserve, the complete liberalization of closed professions, privatizations that have not even been put into the pipeline, and much, much more. It does not appear at this point that any leeway will be provided regarding the measures our creditors are demanding in exchange for the disbursement of the next loan installment. What?s more, the troika will not only demand that the reforms are voted through Parliament, but they will also require proof that they are being implemented, unlike in the past.

The government, and the premier and finance minister in particular, have made it clear that they are determined to stick to the reform path. Throughout Europe and in Washington, top-level officials are wondering whether Greece will walk the walk as it talks the talk. The government must forget about the red lines that the three-party coalition outlined before the elections, while Athens will have to present the troika with its final outline of the reforms it proposes to introduce in order to meet its targets, and I imagine that many of them will be rejected outright. I?m afraid that the coalition partners will have to get over many of their taboos and that things will get pretty rough before the troika agrees to give us any more money.

There are those who believe that Greece can survive without borrowing by raising capital from Greek banks and the European Central Bank (ECB) via the auction of T-bills. This mechanism could help Greece keep its head above water in the case of a serious crisis in Parliament or if talks with the troika cease. But, it would also mean that Greece would have to remain attached to the ECB lifeline as its vital functions shut down. The issue is not about gaining more time but about sailing safely through a final storm, getting the money, recapitalizing banks, paying the state?s debt to private business and averting the risk of a euro exit, fear of which has brought the economy to a standstill.

We need clear solutions. Either Greece will do its best and its partners will respond in kind, or all parties should agree that the game is over and we need a whole new plan. Our partners are clearly preparing for every scenario.