World Socialist Web Site https://www.wsws.org/en/articles/2017/0 ... e-f11.html EU and IMF demand more austerity measures from Greece
By Robert Stevens
11 February 2017
Officials from the European Union (EU) and International Monetary Fund (IMF) agreed Friday to a take a unified hard line against Greece, as the country’s debt crisis worsens.The Syriza government must make a further €7 billion payment to its creditors by July or risk default on its entire debt, which remains at a staggering €330 billion.Greece continues to drown in debt
because virtually every cent of the €300 billion in loans received over the last seven years as “bailouts” have been siphoned off to service its debt to banks and financial institutions that continue to draw interest.
For the last two years, the IMF has been involved in a fraught standoff with the EU, insisting that it would not back any further bailout programmes for Greece if they did not include some debt relief structures. The IMF is on record that Greece’s debt is unsustainable and opposes demands from the EU that Athens must meet a primary budget surplus of 3.5 percent. Instead, it calls for Greece to be bled dry more slowly—based on a 1.5 percent primary budget surplus with debt relief factored in so as not to kill the “milch cow”. Addressing an Atlantic Council event Wednesday, IMF Managing Director Christine Lagarde said, “Reforms are absolutely needed. Somebody can ask me the questions three times over, I will still say the same thing.”
The IMF position was reinforced by concerns that if Greece were forced out of the euro zone, it would mean a relaxing of the relentless imposition of massive budget cuts and threaten overall debt repayment by Athens. According to an IMF report leaked last week, Greece’s debt is set to reach 170 percent of gross domestic product by 2020 and 164 percent by 2022, and “become explosive thereafter”, escalating to 275 percent of GDP by 2060.
Friday’s announcement confirms that whatever tactical differences exist on the means to impose austerity on Greece, there are no conflicts over carrying it out. Reuters quoted a senior eurozone official: “There is agreement to present a united front to the Greeks.” Noting that the proposal had yet to be put to Greece, the official said, “What comes out of it, we will see.”
The party led by Alexis Tsipras is widely despised for repudiating its pledge to oppose austerity and agreeing to impose the most vicious attacks yet in return for a further €86 billion in loans. The latest poll shows Syriza has the support of just 15 percent of the electorate. Tsakalotos boasted last week that a third of the austerity measures Greece had to impose as part of the current programme have been “totally completed”, another third are “totally agreed”, while the rest are subject to “political negotiation. ”
Under conditions in which US President Donald Trump has declared his desire for the break-up of the EU, Greece is once again in the eye of the storm. This week Ted Malloch, Trump’s favoured candidate for US ambassador to Europe, declared that Greece could soon be forced to exit the eurozone and the euro itself was under threat. Malloch told Greek broadcaster Skai TV, “Whether the eurozone survives, I think it’s very much a question that is on the agenda.”
He added, “We have had the exit of the UK, there are elections in other European countries, so I think it’s something that will be determined over the course of the next year, year-and-a-half.”
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