With talks set to resume on Tuesday with Greece’s international creditors, Athens said on Monday it has no intention of implementing austerity measures beyond the commitments it signed on to in the third bailout last July and plans to seek “allies” among European countries that believe now is not the time create political instability in Greece.
Government spokeswoman Olga Gerovasili said on Monday that Athens will abide by the commitments it made last July, “nothing more, nothing less.”
Her comments came after the International Monetary Fund and the European Commission, which overcame their differences at the weekend over Greece’s budgetary outlook, took the wind out of the government’s sails by seeking another package of austerity measures to the tune of more than 3 billion euros (or 2 percent of GDP) in case there are target shortfalls over the next three years as a “guarantee” that Greece will achieve a primary budget surplus of 3.5 percent of gross domestic product in 2018.
The government’s apparent defiance on Monday is a departure from its initial response at the weekend, when it implied that it could be open to discussion over the new measures – which relate to 2018 – as long as it received reassurances that it will get debt relief.
Failure to wrap up the review could see negotiations drag on into June, which would put a further strain on the SYRIZA-led coalition’s fragile government, already struggling to stay afloat with a very slim majority of three deputies in Parliament.
However, the new turn of events could foil the government’s ambitions, which include reaching a staff level agreement by Friday’s Eurogroup meeting in Amsterdam, to unlock vital tranches of rescue funds and pave the way for debt relief talks – a key demand by Greece.
But European Commission sources told Kathimerini on Monday a deal by Friday is not on the cards, as the extra package of austerity measures (and what they include) must first be decided upon and then voted in the Greek Parliament.
In addition, they also said, that a specific timeline of their implementation must also be agreed upon now if budget targets are not met.
Furthermore, the sources said that Greece will also have to cross its red lines on tax brackets and pension cuts.
Hopes for a deal being clinched by Friday were also dashed by statements made by European Commission spokesman Margaritis Schinas, who limited himself to saying that progress had been made in the negotiations but stopped short of saying a deal was at hand by the end of the week.
He described the Amsterdam Eurogroup as “a significant moment” to track the progress made so far, and urged all sides involved not to lose the momentum of the negotiations.
Prime Minister Alexis Tsipras will reportedly contact European leaders this week in an attempt to find support in light of the new demands made by the country’s creditors.