Greece’s Still Teetering on the Verge of Collapse
(Worthy News) – After all-night negotiations, Greece and its creditors salvaged a deal Monday that lessens the chance of Athens going bankrupt and needing to exit the 19-nation eurozone currency bloc.
But the drama is not over yet.
Greece Misses New Payment to IMF Despite Bailout Deal
Greece missed the second debt payment to the International Monetary Fund in two weeks on Monday, despite having reached agreement with official creditors on a new bailout program earlier in the day.
Athens was supposed to remit about 456 million euros ($500 million) to the crisis lender by 2200 GMT, but it had not been expected to make the payment after missing a 1.5-billion-euro debt payment to the Fund on June 30.
Greece’s arrears to the IMF now total about 2.0 billion euros, said spokesman Gerry Rice in a statement confirming the missed payment. [ Source ]
Tsipras Faces Mutiny After Capitulating to Demands
Prime Minister Alexis Tsipras returned to face a mutiny within his coalition after he surrendered to European demands for action to qualify for as much as 86 billion euros ($95 billion) of aid Greece needs to stay in the euro.
With two factions in his government already saying they won’t support the deal, Tsipras met with his closest aides as he tries to stop the revolt from spreading before a vote in parliament Wednesday. Creditors’ demands include an overhaul of sales tax, a broadening of the tax base and a clampdown on pension costs.
Tsipras would “have to change his administration and clear out hardliners and radicals from his party,” as well as rely on opposition support to pass the necessary measures, said Eurasia Group analysts Mujtaba Rahman and Federico Santi. “But it is a tough call to determine how Tsipras will go about doing this.” [ Source ]
Greeks see ‘humiliation’ in harsh terms of eurozone bailout
Haralambos Rouliskos, a 60-year-old economist who was out walking in Athens, described the deal as “misery, humiliation and slavery”.
Katerina Katsaba, a 52-year-old working for a pharmaceutical company, said: “I am not in favour of this deal. I know they (the eurozone creditors) are trying to blackmail us.” [ Source ]
Banks Under Control of Brussels, Instead of Athens
One of the preconditions imposed on Greece for a deal is that it signs into law European rules that would put euro zone authorities at the ECB and in Brussels, rather than Athens, in charge of identifying and closing or breaking up sick banks.
This in turn could lead to a shake-up of the sector that could see some banks close, with losses pushed onto bondholders and possibly even large depositors. In such circumstances, there would be little that Athens could do to prevent this.
One European official had told Reuters that the number of big banks in the country could be reduced from four – National Bank, Piraeus, Eurobank and Alpha – to as little as two. [ Source ]