by
Sam Morgan*
Yesterday, The Brief brought you the eurozone’s great success story, Portugal. Today, it’s time to look at Greece’s continuing woes.
Greece needs to repay €7.5bn in loans by July. To get that money, Athens needed to implement serious reforms. On 18 May, the Greek parliament duly backed a bill that meets the demands of its creditors.
The EU institutions and the International Monetary Fund (IMF) all praised that progress but at last night’s Eurogroup meeting they still couldn’t come to a decision on debt relief. Germany needs the IMF on board, the IMF needs clarity on debt relief first; we’ve heard it all before.
But drawing these negotiations out is taking a devastating toll on the country’s growth and its chances of breaking this vicious cycle of recession, debt and austerity.
Q1 data suggests that even its adjusted growth figure of 1.8% will be hard to match and Greece has now tipped back into recession. Eurozone GDP increased 0.5%. Greece was the only country to go into the red: the figure contracted by 0.1%.
Portugal posted its strongest numbers in a decade, with nearly 3% growth. Ireland’s economy grew by a massive 5.2%. Both have been bailed out in the not-so-distant past.
So why the lack of urgency? Never has ‘time is money’ been so true. One Greek government spokesperson said postponing the agreement last night was better than having a bad deal. The same spokesperson said in December that negotiations might conclude in early January.
Even Greece’s nemesis, German Finance Minister Wolfgang Schäuble, said in April that the longer the agreement was delayed the “more it unsettles the markets and businesses”.
Schäuble and his Greek counterpart, Euclid Tsakalotos, both insisted they are confident a deal will be finally struck in three weeks, “if all goes well”. But that’s a big assumption.
The Commission today said Greece has delivered and now it’s up to its creditors the deliver. But its creditors don’t seem to be on the same page. The IMF thinks predicting Greek growth in 2019 is difficult but the Eurogroup thinks it's ok to predict surpluses for the next four decades.
The price being paid by normal Greek people is immense. Lifetime savings have evaporated, pensions have shrunk. It’s not an exaggeration to say futures have been destroyed.
That is why the empty congratulations of Greece’s creditors, coupled with no deal, are particularly galling.
*Reporter & translator
**first published in Euractiv
By: N. Peter Kramer
