Greece aims for speedy resolution with lenders

After passing within the space of a week a second package of legislative measures demanded by his country's creditors, Greece's prime minister, Alexis Tsipras, can now, reluctantly, move further down a road that only months ago he vowed he would never tread.

With the new legislation now on the statute books, he has fulfilled all the prerequisites handed to him by his country’s creditors for talks to begin formally on securing a third, €86 billion bailout for the overindebted country.

Those talks are expected to get under way today in Athens, where the existing troika of institutions – the European Commission, European Central Bank, International Monetary Fund (IMF) – is expected to become a quartet with the addition of a representative from a new component, the European Stability Mechanism.

At Athens’s insistence, the lenders’ representatives will not meet government ministers but with a senior negotiating team under the co-ordination and supervision of finance minister Euclid Tsakalotos.

Privatisation fund

Apart from issues such as Greece’s financial needs for the next three years, the technical- level negotiations are also likely to focus on the steps

Greece

needs to take to reach the agreed primary surplus of 3 per cent by 2017 and on the fate of the new privatisation fund.

Entertaining the possibility of elections as early as September, the government in Athens is aiming for a quick deal, possibly by August 18th, so that it can draw down the first €5 billion tranche, which would enable it to repay €3.2 billion to the European Central Bank.

That time frame may prove ambitious, given Tsipras’s admission that he is backing a new programme only to prevent Greece making a disorderly return to the drachma.

“We chose a compromise that forces us to implement a programme we don’t believe in and we will implement it, because the choices we have are tough,” he told deputies during Wednesday night’s vote.

Even though it will be a party to the revived talks, it is still not clear whether the IMF will contribute to the financing to the new programme because the Washington-based organisation wants its European partners to commit to a detailed debt-restructuring plan for Greece.

Formal request

“On the debt relief, there would need to be a specific, concrete commitment,” the IMF’s top spokesman said yesterday, adding that the fund could not consider a third bailout until Greece formally requests one.

If preparing to deal with the return of the troika (or quartet) were not enough, Tsipras will also have to deal, sooner rather than later, with the rupture within Syriza that is likely to tear the left-wing alliance apart.

Those divisions are most clear within his parliamentary party, which has left him wholly dependent on three mainstream opposition parties to pass controversial legislation and, further down the road, on implementing it.

After an exhausting, six- hour debate that wrapped up at nearly 4.30am yesterday, deputies voted 230 to 63 to approve the Bill that will simplify civil court procedures and transpose European directives on failing banks.

Among the No voters were 36 Syriza deputies, an improvement on the 39 who failed to back the government a week ago, when the first package of measures was passed.

In the second vote, only one of the rebels, former minister for finance Yanis Varoufakis, voted with the government, on the grounds that he had proposed the same legal and banking reforms while in office.

His change of heart is of little consolation to Tsipras, as most of the party’s Left Platform deputies, as well as the outspoken parliamentary speaker Zoi Konstantopoulou, remain implacably opposed to the new bailout.

After a meeting with Konstantopoulou yesterday, Tsipras made it known he was concerned about the “institutional discord” between his government and the speaker, who told deputies the previous night that the Greek government was the victim of “blackmail” and a “coup”.

Strength in diversity

While the rebels insist they believe Syriza’s strength lies its diversity, that theory will be put to the test if and when the party’s central committee, where opposition to the government’s sudden change of course is much greater, convenes.

Tsipras will likely attempt to stave off any internal party meetings until after a deal is done with the creditors, at which point it will be difficult to avoid a split.