Brussels looks set to finally turn its back on beleaguered Greece

EUROPEAN DIARY:As tension mounts over Greece’s future in Europe, it seems the final chapter of the saga is about to unfold, writes ARTHUR BEESLEY

GREECE IS under political and economic siege as its troubled government struggles to find a way of catching up on ground lost in its second bailout.

Europe is losing patience rapidly. At issue once more is whether the country can maintain its membership of the single currency. This time it’s really, really serious. A sense of urgency is increasingly palpable.

When the EU Commission said its chief José Manual Barroso would go to Greece today for talks with prime minister Antonis Samaras, a spokesman said the meeting was nothing more than a “regular” political engagement. In the same breath he said Barroso had not been to Athens since June 2009, prompting one wag to say it was clear that the meeting was not at all regular.

The fact remains Greece is under constant surveillance from Brussels and other big capitals, with every little move on the panorama noted in minute detail. The outlook appears grim.

Two months of inaction in Athens during successive election campaigns has delayed dozens of reforms tied to the second bailout, calling into question the delivery of crucial bailout loans. Recession too has worsened, undermining the basic fiscal assumptions which underpin the rescue plan.

Samaras made his name as opposition leader by criticising the austerity drive, arguing it only aggravated the crisis in Greece. Even if he manages to intensify a politically damaging reform drive to the satisfaction of his European masters, his administration is going to need considerably more than the €130 billion foreseen under the second bailout to keep the books balanced for years to come.

Precisely how much more is to be divined by inspectors from the EU-ECB-IMF “troika”, who are back in Athens this week. Estimates vary on a range between €20 billion and €50 billion. Even at the lower level, figures of this order present a huge problem for euro zone leaders as parliamentary approval is required to vary the bailout programme or provide additional loans to the country.

All of this feeds into a markedly downbeat atmosphere in Brussels over the prospects for the country. Amongst weary officials involved in the rescue effort, the thinking goes that Greece has but one last shot this summer to prove to its sponsors that it can implement the astringent reform programme. At the same time, it is readily acknowledged in private that quite a few finance ministries elsewhere in the euro zone have already given up hope of the country ever coming good within the single currency.