On Friday, Prime Minister Alexis Tsipras backed down on nearly every promise made to the Greek electorate except one, to stay on the euro. After so much tough rhetoric, the question is why?
I believe the answer is the Greek primary account surplus vanished, making it impossible to honor all commitments made.
Simply put, Greece had to choose between staying on the euro and honoring the other campaign promises.
Greece Attacks Tax Evasion
On Monday, Greece will submit its reform plan to eurozone officials. At the heart of the deal, Reforms Will ‘Combat Tax Evasion’.
Greece will crack down on tax evasion and streamline its civil service in its bid to secure a bailout extension, minister of state Nikos Pappas says.
The government is working on a package of reforms that it must submit to international creditors on Monday. If the reforms are approved, Greece will be granted a vital four-month extension on its debt repayments.
Mr Pappas said the reforms being proposed would take the Greek economy “out of sedation”. “We are compiling a list of measures to make the Greek civil service more effective and to combat tax evasion,” he told Greece’s Mega Channel.
Illusion Shattered
Streamlining civil services will reduce expenses, but it’s hardly what the leftist government promised. Combating tax invasion was a campaign promise, so make it two campaign promises kept for those keeping an official score.
Nonetheless, those expecting Tsipras to immediately honor all pledges, just had their illusion shattered.
Reuters reports Greece Readies Reform Promises.
Top Marxist members of Tsipras’s Syriza party, a broad coalition of the left, have so far been silent on the painful compromises made to win agreement from the Eurogroup.
But veteran leftist Manolis Glezos attacked the failure to fulfill campaign promises. “I apologize to the Greek people because I took part in this illusion,” he wrote in a blog. “Syriza’s friends and supporters … should decide if they accept this situation.”
Glezos, a Syriza member of the European Parliament, is not a party heavyweight. But he commands moral authority: as a young man under the World War Two occupation, he scaled the Acropolis to rip down a Nazi flag under the noses of German guards and hoist the Greek flag, making him a national hero.
A government official said Glezos “may not be well informed on the tough and laborious negotiation which is continuing”.
The opposition pounced on the climbdown from promises that have raised huge expectations among Greeks. “No propaganda mechanism or pirouette can hide the simple fact that they lied to citizens and sold illusions,” said Evangelos Venizelos, leader of the socialist PASOK party.
Friday’s agreement merely buys time for Greece to seek a long-term deal with the Eurogroup. Euro zone members Ireland and Portugal have already exited their bailouts, but Greece faces yet another program – on top of bailouts in 2010 and 2011 totaling 240 billion euros – when the extension expires.
“Once you get them into the safe space for the next four months, there’ll be another set of discussions which will effectively involve the negotiation of a third program for Greece,” Irish Finance Minister Michael Noonan said on Saturday.
