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13/08 – Greece: Another final deadline approaches

The media in most member states continue to comment widely on the Greek bailout agreement and terms. On 11 August Greece and its creditors reached a technical agreement on a third bailout plan, raising hopes of an end to months of political and economic uncertainty. Yet the Greek parliament, several European national parliaments and the Eurogroup still have to approve the deal. The European partners’ reactions have been quite cautious so far, especially in Berlin.

Several media notably report that German Chancellor Angela Merkel, sceptical about the deal, said she favours bridge financing to cover Greece’s short term needs, rather than a full three-year agreement that needs more talks about the details. Greek and German media, as well as Les Echos report that even if “Alexis Tsipras’s concessions made in just one month are significant,” Merkel’s spokesperson, Steffen Seibert, didn’t say yesterday whether or not Berlin would approve this agreement. Moreover, Germany remains sceptical regarding the uncertain long-term involvement of the IMF.

Nevertheless, according to Malta Times, earlier yesterday Mr Seibert welcomed the MoU as a “substantial result” which went in the “right direction.” Germany’s Finance minister Wolfgang Schäuble, for his part, considers the third aid package “insufficient,” he criticises the fact that many reforms will only be implemented in October and November, writes Bild Zeitung. EP President Martin Schulz, concerned by Germany’s stance, informed Greek PM Alexis Tsipras yesterday that he intends to publicly call on the German government, the German Parliament and the SPD party, to approve the deal, Kathimerini reveals.

Finish Finance Minister Alexander Stubb said that Finland will examine all the details of the agreement, not excluding the possibility of choosing the temporary solution of bridge financing to cover Greece’s obligations to the ECB and the IMF. The Greek Parliament should vote on the text within the next two days, and euro area finance ministers will hold a conference call on the agreement on Friday August 14th.

In the meantime, Reuters reports that the first evaluation of the implementation of the third support programme is expected in October. Kathimerini writes that during a press conference, Mr Tsipras stated that he remains optimistic that Athens will manage to reach an agreement with its partners and will receive the financing support by the European mechanism. According to Le Monde, despite some countries’ reservations, the Eurogroup will give its green light to the bailout plan. Nevertheless, a Wall Street Journal Europe editorial warns that the deal is unlikely to succeed where previous deals failed.

Several media show their concern regarding the political crisis within the Syriza-led government, as Mr Tsipras will have difficulty in finding a majority in the Parliament to pass the reforms demanded, pointing to possible early elections, further aggravating the country’s plight. Huffington Post reporter Daniel Marans suggests that the problem facing the country is that its creditors are demanding new budget surpluses in order to maintain its debt repayments, which means taking money out of the economy with spending cuts and tax increases – measures likely to stall economic recovery even more.

Bursa and Diário Económico quote former Greek Finance Minister Yanis Varoufakis as saying that the new plan “will not work.” Commenting on the negotiation process, Politiken reveals that a large majority of citizens in seven EU member states believe that the EU has handled the economic crisis in Greece poorly. Nevertheless, Jean-Marie Colombani, former Director of Le Monde, writes in El País that the Greek crisis has shown that the EU has always found a compromise-based solution while populism only ever leads to dead-ends and that Germany has taken a serious misstep.

 

 

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