The bitterest of medicines

IMF wants debt relief and restructuring rather than more debt, which on past performances is unlikely to be paid

The members of the Greek Parliament on the night of July 15 passed a contentious and divisive package of fundamental structural reforms that underpins yet another economic bailout. Outside parliament, anger and frustration turned into confrontations with the police, petrol bombs and teargas. The bailout — the third — is only a partially done deal, and much hinges on how other states in the European Union (EU) are successful in selling it to their own legislatures. Thus far, the French have voted in favour. Germany will vote today and the wrangle that surrounds attempts to keep Greece as a member of the EU and avoid complete economic meltdown and Grexit — continues.

The government of Alexis Tsipras in Athens came to power promising to do almost the exact opposite of what he has now persuaded his parliament to approve. His deputy finance minister resigned as a matter of principle, and 40 of his MPs did not vote for the measures. Mr Tsipras is still in power, but he leads a minority government. Even if the package, worth €7 billion in the very short term, is approved across the EU member states, it is going to take months to implement, affecting, as it does, state pensions, Sunday trading and increases in VAT among a minefield of other unpopular issues. Beyond the short term, the bailout is worth €86 billion assuming the Eurozone members all agree to put money in the pot — and the IMF, one of Greece’s creditors — is not at all happy with the deal. It wants debt relief and restructuring rather than more debt, which on past performances is unlikely to be paid. There are few choices left for Mr Tsipras. He could eject the ‘objectors’ in a cabinet reshuffle, but unless the European Central Bank props up the Greek banks in the next few days, people, ordinary people, are going to start running out of cash and food insecurity is an imminent threat for many. A deal may have been done, but Greece is still in intensive care and on life support. And not all patients survive treatment.

Published in The Express Tribune, July 17^th,  2015.

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