Apr 18

En attendant Godot: waiting for closing the (2nd) evaluation round of the Greek bailout programme

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It is becoming a joke, a never ending anticipation for the soon to be coming final negotiation round, in order to reach the so-called staff-level agreement and catch up with the following Eurogroup meeting. This is happening since last April 2016, always ever closing the ending of the 2nd evaluation round of the Greek bailout programme!

It turns to be something which whenever will be reached, nobody will understand the “difference”, especially in terms of a climate change in the economy. Simply because the next evaluation round will be starting right after this one, having to meet all the pending matters – usually the reforms with the public sector -, which have few weeks earlier been  agreed with the institutions in order to be “transferred” to the next round, i.e. kicking the can further down the road. It is indeed like waiting for the never shown up Godot – Samuel Becket perfectly gave the anticipation context in this play.

And while waiting, it seems that the working hypotheses whereas all financial calculations are being agreed upon, need to change, again. Because as expected – today’ s IMF WEO is shedding more light upon – the anticipated growth rate for 2017, as in the current negotiations, is not going to be met, lagging in the order of magnitude of 0.7% of GDP (an anticipated decrease of the 2017 primary surplus of € 1-1.5bn…)

I know the counter-argument to this. It goes that the government has already from 2016 summed up a primary surplus of some € 6.5-7bn, so there is a lot of public finance leeway there. But, keep in mind that more than half of this over-surplus had to be forwarded to the private sector (economy, being public sector’ s payments due) and that nobody can be sure that the social insurance contributions during this year (2017) will meet the expectations and close the balance – contrary to that there is strong evidence that they will not!

Are we waiting in vain? Well it seems so, until at least the German elections! Unless and in the meantime, under the increasingly depressing public agenda and the conditions in the economy, the political parties understand that only a broad parliamentary majority can guarantee a less risky pathway out of the crisis. And then perhaps the political staff facilitate such a development.

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