Athens seemed to have moved closer to a deal on new loans with its eurozone lenders but many details still have to be worked out.
Greek media headlines on Tuesday were doom-laden about the future for the country’s pensioners and public servants even as Athens seemed to have moved closer to a deal on new loans.
Prime Minister Alexis Tsipras told his cabinet an agreement with the country’s eurozone lenders paves the way for releasing more than five billion euros that Greece needs to cover debt repayments maturing in June and July and to pay its bills.
Tsipras said the agreement shows that Greece is no longer isolated, reflecting on a clash with lenders over austerity last year that nearly forced the country out of the eurozone.
“Greece is not alone and isolated any more. It enjoys the support of political forces and governments which have finally realised that this country and its people have the right to turn a page,” Tsipras told his ministers.
“On our side we kept our obligations, both to the lenders and primarily to the Greek people – which is important because we are applying the deal using every possibility for flexibility with the goal of protecting society.”
But many details have to be sorted out before another meeting in two weeks time.
The European Commissioner for Economic and Financial Affairs Pierre Moscovici explained there is before the next meeting on the 24th of May there is a need to work out what happens if Athens fails to reach agreed fiscal targets for 2018.
He said there will be a credible, objective, contingency plan put in place ahead of time which will go into effect automatically.
Harry Theoharis, the former head of Greece’s tax authority and now an opposition MP, told Euronews he anticipates the government will not meet its budget target leading to automatic spending cuts: “First, I believe this mechanism will definitely come into force. We can’t escape missing the targets. Some say we should have introduced this from the very beginning. Second it will directly hit the public servants and the pensioners cutting wages and pensions by the same amount by which we miss the targets.”
Greece also got to talk with the eurozone finance ministers about some debt relief which it has long wanted. The government would still have to pay back all it has borrowed, but would probably be allowed more time.
The left-led government needs debt relief badly to lure back investors, appease markets and convince Greeks that their sacrifices are paying off after six years of austerity