Around two weeks ago, the greatest question in the Greek debt crisis was whether the Greek government would capitulate to its creditors’ demands and get the short-term money it needs to retain and stay in the eurozone. Now, after two “dramatic” weeks of deadlines and red lines and banking emergency and a referendum, the situation has reversed. Greece’s European partners need to decide whether they want to take “yes” for an answer and keep Greece in the eurozone, or whether they want to find a pretext to say “no” and try to force Greece out.
The scenario currently-
Days ago, Greece’s creditors set a Sunday deadline for the country to come up with an acceptable set of budget plans and economic reforms or else have its banking system completely cut off by the European Central Bank.Thursday night, Greece presented a plan that represents a near-total surrender on all relevant points.Rather than give a quick answer, Greece’s European partners called for a couple of days of study in advance of a Saturday meeting, essentially guaranteeing that a “no” verdict on the deal will leave no time for future negotiations.Even though Greece has given in to all of its creditors’ important demands, there is a school of thought that says the “Eurozone will be greater without Greece”. There is also a school of thought that says that the nation “will be better off leaving the Euro”.There’s just enough wiggle room left that Europe could find a reason to tell Greece no, even though there aren’t many outstanding issues remaining.
Europe equivocating-
The latest Greek proposal represents an essentially total cave-in by Greece to what its creditors had been demanding. The two main remaining outstanding points of disagreement are essentially trivial:
While the nation seems promising than ever before, many new reforms such as wanting to exempt hotels on some small outlying Greek islands from sales tax increases are urgently to be “considered” to be implemented along with the pension reforms in October.
If Prime Minister Alexis Tsipras had made this offer in February, the deal would have been sealed immediately, with Europe’s creditors jumping for joy. If he’d made it as recently as two weeks ago, the deal would have been greeted extremely warmly. But over the past 24 hours many eurozone finance ministers have sounded skeptical, despite their near-total victory on all important matters.
Tags: EU Gre-xit Greece Greece economy Greek economy Grexit
