Mar 24

While the crawling 2nd round of the Evaluation of Greece’ s 3rd Bailout Programme seems to be approaching its crescendo, even by spreading “dissonant sounds” during the execution of the European anthem in Rome for the EU’ s 60th Anniversary – because of the Greeks insisting to include reference to the European acquis as it regards the social and employment agenda in the Declaration of the currently 27 Member States -, most of the engaged with this evaluation stakeholders seem to count on a smooth “fading out”. Having an agreement by mid April, in order to catch up with the corresponding Eurogroup’ s meetings, in order to agree on the transfer of the anticipated installment of some billions of Euros to the Greek accounts. So that the Greek government will mange to in-time meet its huge pending debt repayment liabilities of about € 7bn sometime in July.

Both the European institutions and the Greek government are much counting on the unexpected and significant surplus in the public accounts  (& its cashiers?) of the year 2016, originated from a huge increase of income, real estate and value-added taxes, which have contributed a lot to this public sector’ s surplus. Without underestimating the equally significant contribution to this surplus from the upholding of the third party payments of the state to the private sector, which has again reached unprecedented heights. With this surplus in hand and even with only a part of the scheduled installment from the ESM (having done part of the reforms scheduled), both the Europeans and the Greek authorities seem to be happy and live with, until just after the German elections’ milestone. The Commission (& ESM) will be happy, without having to face again the fiercely summer negotiations of the Summer of 2015, the Germans will avoid a “white noise” problem during their election period and the Greek government will prolong its survival reaching the end of year 2017!

You can guess who the big losers will be. First before all the Greek economy and the already devastated Greek society, which will be asked already from this summer on, to pay the highest penalty, in terms of the prevailing recession and the necessary reforms with the social insurance system – through further pensions’ cuts. Yet, blaming nobody but their own preferences and decisions, starting with the January 2015 elections, then with the July referendum and finally with the September 2015 elections.

Among those losing time and performance capacity – as well as having some sort of damage in their public image  – are the IMF and the ECB. The former will have to enter in a follow-up bailout agreement with Greece, as having promised to the Germans and other Northern Europeans, in the aftermath of one more round of a European led not quite performing support programme. While the latter, the Central Bank, will be missing the potential to include Greece into its QE framework and significantly contribute to the economic recovery of the country and eventually Europe’ s at large.

To avoid this evolution scenario, there is only one option to work for. First, the Greek pro-European opposition parties need to be collaboratively engaged in a sophisticated policy preparatory phase, in line with the current MoU provisions and those of the – still under negotiation – adjoined Support Programme of the IMF. And thus they will send a clear messages around that the Greek government needs to increase its engagement with the Programme and delivers, by exposing a relation of ownership and competent delivery. This is a scenario with such low chances to happen!

Unless, the exponentially increasing stress on the economy and the society provides with a hard-to-bear pressure on the parliamentary majority of the governing parties, implying for a fast consensus building and recovery activity – no matter whether through elections or (not so easy) via a re-composed parliamentary majority, to support a new governance practice. Time will tell, hoping with the minimum cost both for the Greeks and for the rest of the Europeans.

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