GREECE’S Syriza-led coalition gained some breathing space last night when its European creditors approved a four-month extension to its financial shackles.
The 19-country eurozone endorsed the Athens government’s plea for an extension after the European Commission, European Central Bank and International Monetary Fund — the so-called troika handling Greece’s loans — backed a list of commitments offered by letter late on Monday.
Greece will, in all likelihood and despite commitments given to its supporters, have to negotiate a new financial agreement with its creditors to see it past June, when big bond repayments are due.
“The three institutions agreed to start the process with this,” said eurozone finance ministers’ president Jeroen Dijsselbloem.
“They thought it was a serious enough list and all the countries have just agreed with that in the meeting, so we can start.”
The extension must now be approved by some national parliaments, including Germany’s, before midnight on Saturday.
Greece had to draw up the list, which includes measures to combat tax evasion and corruption, to get the bailout extended.
Greece’s EU “partners” are intent on extracting further concessions from Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis, with the eurozone saying yesterday: “We call on the Greek authorities to further develop and broaden the list of reform measures.”
The IMF insisted that the vague promises in yesterday’s list now have to be turned into real action.
IMF managing director Christine Lagarde complained that there are no “clear commitments to design and implement” reforms to pensions and sales taxes, or “unequivocal undertakings” to continue previously agreed policies to open up closed sectors, on administrative reforms, privatisation and labour market reforms.
Athens has pledged to combat tax evasion and corruption, reduce bureaucracy, review public spending, modernise the pension system, reform the judicial system and address rising poverty through measures that have “no fiscal effect.”
It is also committed not to roll back any privatisations that have already been completed and to “respect the process, according to the law,” of any tenders that have already been launched.
Privatisation was one element of Greece’s bailout that Syriza had promised to cancel, but this may not be its final retreat.