Greek government facing triple political threat

Greek government facing triple political threat

Athens, April 12, 2016/Independent Balkan News Agency

By Zacharias Petrou

The Greek government is facing a triple crisis as ongoing talks with creditors continue to hang in the balance while at the same time the refugee crisis is spiraling out of control and intra-governmental rifts appear to be resulting in a fresh political crisis with unpredictable consequences.

Thriller

The marathon “thriller” talks between the government and creditors ended without agreement at 07:00 AM on Monday as major differences remained on all major issues. Agreement so far has only been reached on most of the tax measures that will be implemented.

European Union institutions and the International Monetary Fund appear to have agreed a common stance in pushing Greece to implement fresh austerity measures that add up including tax hikes, deep pension cuts, cost-cutting measures, privatizations and the sale of non-performing loans to distress funds.

The Greek side is expected to emerge from talks early Tuesday morning with two separate documents, one with European creditor institutions and a separate one with the International Monetary Fund. The two texts will be similar but not exactly the same, as the IMF has differentiations it insists on.

MoU

The government is in a race against time to seal a deal with creditors by Tuesday, after which crucial political talks will follow at the IMF Spring Meeting in Washington on April 15-17.

At the Washington meeting, political negotiations will determine whether or not Greece will be granted sufficient debt relief, a prerequisite the IMF has set for its participation in the Greek bailout program.

The Greek government has softened its stance towards the IMF in the last few days – compared to last week – however it is clear that it still has huge differences with the fund over the austerity measures the latter is demanding.

Key players including German Finance Minister W. Schaeuble, IMF Managing Director Ch. Lagarde and ECB chief M. Draghi are expected to work towards a solution which will most probably result in an additional Memorandum of Understanding with the IMF in order for the first bailout program review to be swiftly concluded. This will almost certainly include a series of fresh measures and reforms linked to debt relief which will, however, be limited to restructuring, not a nominal “haircut” of Greek debt.

A subsequent Eurogroup meeting on April 22 could prove crucial as it is expected to rubberstamp a possible agreement on the IMF participation and the road map for the implementation of measures by the Greek government. What is not yeat clear is when the country will receive the next tranche of its 86 billion-euro bailout loan.

Refugees

Violent episodes at the Idomeni refugee camp in Greece’s border with FYROM over the weekend created the impression that the government is not in control of the situation and is reduced to merely observing developments unfold.

Despite promises to clear the camp by mid-April along with the other makeshift refugee camp in Piraeus Port, there hasn’t been much progress in this direction while at the same time refugees are protesting against the closure of borders.

Migrants clashed with police from FYROM on Sunday after trying to find a way through the fence separating Greece from FYROM. Some of the violent clashes took place in Greek territory with the Greek authorities doing nothing to stop the interference of FYROM police. Activists have also been allowed to operate at refugee camps, urging and organizing refugees to violently pursue the opening of borders.

Furthermore, clashes between neo-Nazi Golden Dawn party supporters and far-left and anti-fascist groups at the Port of Piraeus on the weekend over the refugee crisis, led to the government being heavily criticized for failing to exert control over the refugee situation and impose public order.

According to reports, there is dissatisfaction amongst top government officials for the way Public Order Minister Nikos Toskas and Greek police have handled the situation, allowing it to spiral out of control, while damaging the government’s image.

Piraeus

The objections of Shipping Minister Theodore Dritsas to the sale of Piraeus Port Authority (OLP) to COSCO which Alexis Tsipras rubberstamped last week has caused great concern to the government. According to reports in the press, the Prime Minister is unhappy with the minister voicing his strong objections publicly and the attack he launched on Greece’s privatization fund (TAIPED) president Stergios Pitsiorlas.

According to reports in the press, the Dritsas issue could signify a significant political problem for the government ahead of votes in parliament on the bailout program review. The minister’s opposition to the OLP privatization have embarrassed the government, especially as Dritsas stated that he intends to create a new ‘public’ OLP.

Infrastructure and Networks Minister Christos Spirtzis also attacked TAIPED president S. Pitsiorlas and voiced similar objections to the Piraeus Port privatization as the Shipping Minister. His criticism of TAIPED is reportedly a sign of things to come as Spirtzis is expected to oppose other privatizations being planned too. Criticism at central governmental decisions may cause doubts about the longevity of the Tsipras administration at a crucial juncture for the government.