Comments ahead of today’s vote in Greek parliament

THINGS CAN ONLY GET FETA?

The coverage of the Greek crisis is more diverse today ahead of the vote in the Greek parliament. Le Figaro reports that the Greek Parliament is to vote on the adoption of the European directive on a banking resolution. This crucial step will authorise the seizure of part of deposits exceeding €100,000, which causes considerable concern in Greece, but should get the green light from Greek MPs.

La Stampa reports that Alexis Tsipras “cannot afford any wrong steps.” Ahead of today’s vote, Kathimerini reports that yesterday Greek PM Alexis Tsipras defended his choice to keep Greece in the eurozone. He fully undertook the responsibility for a difficult compromise against those who invest in unrealistic alternatives and launched a harsh attack against the former Minister of Reconstruction of Production Lafazanis and former Finance Minister Varoufakis, without outright naming them.

EC President Juncker, Vice-President Dombrovskis and Commissioner Moscovici discussed the Greek crisis in interviews with the media. In an interview with BFM, Commissioner Moscovici said Greece must stay in the eurozone, but it must also finally provide itself with the state and tax structures allowing it to be equal to its ambitions. Now we have to find the right balance between European solidarity and Greek responsibility.

Quoting Commissioner Moscovici’s interview, Greek (Naftemporiki) and Italian media stress that Mr Moscovici stated that the eurozone countries have agreed on the relief of the Greek public debt via the reduction of the interest rates and the extension of the loans’ maturities. In a commentary in Milano Finanza, Angelo De Mattia argues that taking action on Greece’s debt, and fostering growth, is “fundamentally important”. Without this action, Greece is likely to need a fourth bailout programme soon.

EC President Juncker told La Repubblica and Le Soir that a deal with Greece avoided the worst-case scenario due to fear. Greece has no reason for feeling humiliated, as the Commission did a good job in smoothing things over and Mr Juncker did his best not to let Alexis Tsipras lose face and to leave Greece a space for self-determination. Vice-President Dombrovskis told LTV-1 on 20 July that “if the necessary reforms are implemented, Greece could return to growth already next year.” In an interview with TV3, he is less positive, warning that it is almost the last moment for the Greeks to regain trust of the EU member states and lenders.

Among the opponents to the agreement, there is former Greek Finance Minister Yanis Varoufakis, who writes in Naftemporiki that the Euro Summit of 12th July dictated the terms for the surrender of Greek PM Alexis Tsipras, who – terrified of the alternatives – accepted them all. One of those terms concern the sale of the remaining state assets of Greece. Tageszeitung’s Ulrike Herrmann comments that the reforms will be very difficult if not impossible to push through politically. If partners do not soon relieve the pressure on Greece, a Grexit will be inevitable.

According to Le Figaro, many economists are worried that the agreement will only lead to the repetition of past mistakes. Measures taken will “amplify the recession in the short term” and “weigh on investment.” In an opinion piece in Libération, three philosophers from France, Germany and Italy state that the agreement in Greece is “fundamentally inapplicable” and only serves the purpose of draining Greece’s economy. Europe is no longer ruled by the European Commission but by the Eurogroup. The Greek crisis is far from over, they foretell, and the way Alexis Tsipras chose “the lesser of two evils” compels Europeans to stand united and defend a more democratic Europe.

Among those who believe Greece should work harder, there is Estonian Prime Minister Taavi Rõivas who demands, in an interview with Handelsblatt, reform in Greece. He claims that other countries such as his own have already implemented the reforms currently being demanded from Greece. He adds that Estonians do not want to leave Greece out in the cold, but also want to see reforms implemented.

Head Economist of the German Ministry of Finance Ludger Schuknecht writes in SZ that economists such as Thomas Piketty, Jeffrey Sachs and Joseph Stiglitz, who have all criticised Germany´s policy towards Greece, have forgotten the importance of stability, solidarity and respect for the euro area. FAZ notes that despite agreeing the abolishment of early retirement policies and an increase in value-added taxes, the Greek government has not yet implemented these measures. The authors mention suspicions that Athens has also weakened the provisions.

Meanwhile the discussions over Greece’s debt crisis have shown that “there is much to be done” to reform the EU and the eurozone. In a commentary in Il Sole-24 Ore, Carlo Bastasin argues that, “after the Grexit risk,” there must be a “common reflection” over the “method” of the political handling of the crisis. Isolating Greece, as a “unique and exceptional” case, has not created an “identity of views” among member states.