Fearing political crisis, Greece plots escape from bailout

27 Σεπ 2014

(Reuters) - Four years after a messy descent into emergency funding to stave off bankruptcy, Greece's government is trying to pull the plug on a deeply unpopular bailout program to secure its own survival.
   Under growing pressure from anti-bailout leftists, Greek Prime Minister Antonis Samaras desperately needs a new narrative to get the backing of lawmakers in a crucial presidential vote next year and rally Greeks fed up with four years of austerity.
   It is a gamble with high stakes for the Greek economy and Athens' relations with its euro zone peers. Failure by Samaras to get his presidential nominee elected would trigger new polls that his anti-austerity rivals would almost certainly win.
   In Berlin earlier this week, Samaras for the first time publicly acknowledged that Athens hoped to wean itself off a 240-billion-euro ($305-billion) EU/IMF aid package a year before its scheduled end in early 2016.
   He offered no details, but Athens is calculating that declaring an end to the reviled bailout could be just the political game-changer it needs, with the end of bailout funding from the European Union in December offering a logical moment to seal the exit of the International Monetary Fund as well.
   "It makes political sense, completely 100 percent," a source familiar with the discussions said. "The IMF is not pushing to leave, the government is pushing for it."
   Pulling this off, however, will almost certainly require Athens to notch up rapid-fire successes on several fronts - a swift end to its current bailout review, securing debt relief and the backing of European partners for going it alone.
   In addition, forgoing over 12 billion euros in IMF loans and finding its own financing, just two years after a sovereign debt restructuring, remains a risky bet.
   "If Greece completes this review with the blessing of the troika, who say 'Great, you've done a lot', maybe gets debt relief and a monetary agreement with the EU, then the markets may say 'That's good' and it can raise 10 billion over the next year," the source said.
   "It's a plausible financing scenario but there are risks for a country with emerging market access," the source added, referring to Greece's still low credit ratings.

RADICAL LEFT AHEAD
For Samaras, all this will have to happen before February or March next year when he needs the support of 180 deputies in the 300-seat parliament to push through his nominee for president.
   He has only the support of 154 deputies from his New Democracy party and Socialist PASOK coalition partner, but a bailout exit could help lure some of the 24 independent lawmakers and perhaps even a small anti-bailout party.
   The radical leftist Syriza party, which has 71 seats in parliament and won the EU elections in May on an anti-austerity platform, has pledged to block the government's candidate.
   Failure to elect a new president would require a general election, which Syriza would almost certainly win according to opinion polls that give it a 2 to 6 percentage point lead.
   "The government is now playing all its cards in an effort to get the 180 deputies it needs ... to stay in power," said political analyst John Loulis. "But there is a sense of political instability and a government that is wearing out."
(Source: reuters.com)

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