A decision rich in meaning

A decision rich in meaning

The government did not get what it hoped for in Monday’s Eurogroup meeting. If Alexis Tsipras really has rid himself of delusions, as he claims, then he must be feeling very uncomfortable if he can now read the messages from our EU partners correctly. The content of these messages is determined by relations between the countries, by their relations with the IMF, by the domestic difficulties that their governments face, but also by the suspicion with which they see Athens. Of course, the bad climate preceded the Eurogroup and, in this light, the Finance Ministry and the prime minister’s office should not have raised hopes for something better.

It was absolutely clear – and was confirmed last week in Washington – that some of the European creditors (Germany in particular) disagreed with the IMF with regard to the Greek debt. The IMF insists on an immediate debt restructuring in order for it to remain in the program, whereas for German Finance Minister Wolfgang Schaeuble and others the issue is not yet mature and there is time for restructuring later. Of course, everyone understands that Germany is in no mood for a restructuring before the 2017 elections, especially when the Christian Democrats feel so threatened by the populist, xenophobic Alternative for Germany.

For the same reason (and also because Mr Schaeuble and possibly Angela Merkel do not often share the frequently positive position of the European Commission on various issues), they do not want to embolden Jean-Claude Juncker and Pierre Moscovici to make proposals without prior agreement. That is why they keep their distance or overturn them, as they did this time with regard to the French commissioner’s reassurances before the Eurogroup meeting. On the other hand, Germany knows full well that the program cannot hold up without the IMF, as its parliament accepted a third bailout agreement with Greece on condition that the Fund was part of it.

All of these complicated issues are beyond the Greek government’s sphere of influence, as it lurches between the Europeans and the IMF. Athens needs to understand the message from the Eurogroup: first, that creditors still do not trust it to channel the funds it receives from them to the intended recipients (such as those to whom the public sector owes money) and they demand proof; and second, that with the Greek government’s behavior in many sectors, their support is not  guaranteed. So, the prime minister should not rush to proclaim triumph at his party congress this week.

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