You are here

Greece: Difficult days ahead

14/07/2015 07:34
The days following the agreement of Greece with its partners for the third adjustment program of €82-86 bn will be very difficult.

Eyes now focus on the moves that the Greek Prime Minister Alexis Tsipras will make both in terms of the introduction of the memorandum bills in parliament, and the management, and possibly the reshuffling, of the government scheme.

The thorns are many for the Greek government but also the commitments and the schedules are specific.

The Prime Minister must pass the measures by the Greek Parliament without any losses, something that seems very difficult.

The feverish processes for the preparation of draft laws based on the summit decision and related to tax, labour and pension issues started on Monday morning.

In the time period leading up to conclusion of the negotiations it was agreed to start preparations for the bridge program to finance the immediate needs of Greece.

Eurogroup head, Jeroen Dijsselbloem, after yesterday's meeting, described the new program of Greece as complex.

As he suggested yesterday, the “golden key” for the loan-bridge has not yet been found. It may take, he said, four weeks to seal the bailout deal.

Commissioner for Economic Affairs Pierre Moscovici spoke of economic, technical, fiscal and political difficulties.

The Greek issue will be discussed at today's meeting of the European Working Group (EWG) and the conclusions will be presented to the Eurozone ministers who are expected to meet via teleconference on Thursday.

Amid these rapid developments, the country's banking system continues to “suffer” with the Greek banks remaining closed until Wednesday following a ministerial decision. Although default seems to have been avoided, the support with €10-25 bn implies an additional burden of the Greek debt.

The ECB Board yesterday decided to maintain the amount of funding limit of Greek banks via the emergency liquidity assistance (ELA) unchanged, awaiting the political process in Greece for the approval of memorandum bills.

International markets have reacted positively after the agreement in Brussels.