The troika’s back
Perhaps the biggest reversal Tsipras made to keep Greece in the eurozone.
ATHENS — The night he was elected prime minister, a jubilant Alexis Tsipras declared the troika “a thing of the past.”
Six months on, troika officials were due back in Greece on Friday to prepare talks that could start on Monday on the debt-ridden country’s third bailout. Their return is a stark illustration of the enormous compromises Tsipras has had to make to keep Greece in the 19-country eurozone.
“The troika returns to the scene of its crimes,” read Friday’s headline on Iskra, a news website run by far-left members of prime minister Tsipras’s party who have rebelled over the tax hikes, budget cuts and economic reforms demanded by creditors in exchange for up to €86 billion of assistance.
Under the preliminary deal agreed on July 13, representatives of the European Commission, the European Central Bank and the International Monetary Fund will monitor progress on reforms and approve legislation before it is sent to the Greek Parliament.
Now Parliament has passed the so-called prior actions, negotiations will take place on a final memorandum of understanding to unlock the first loans from the new program.
Greece needs an urgent cash injection to make a €3.4 billion bond repayment to the ECB on August 20. Government officials have said the talks should be finished in time for the payment, although the country might be able to secure another bridge loan if negotiations drag on.
There remains uncertainty about the extent of IMF involvement in a third bailout, however, and local newspapers quoted a Fund spokesman as saying they were awaiting an invitation from Athens before sending their representative.
A Greek government source said that was just a formality, and that IMF staff were expected to arrive in the capital within the next few days.
The IMF has not said yet whether it will contribute cash for Greece’s new bailout and is insisting on more debt relief as a prior condition. European governments, on the other hand, say the IMF must be involved but that debt restructuring will only be considered if Greece carries out the promised reforms.
A representative of the eurozone’s bailout fund, the European Stability Mechanism, will take part in the meetings, turning the troika into a quartet.
“Troika” has become a byword for harsh austerity policies in Greece. When Tsipras took office, his government lobbied for the name to be dropped from official parlance and the creditors have been re-branded as “the institutions.”
Soon after taking office, former Finance Minister Yanis Varoufakis stunned lenders by saying the government did not plan cooperate with “that flimsily structured committee.”
The return of the unpopular troika is not Tsipras’s only problem.
Some members of his Syriza party have voted against the reforms and several top officials have suggested that an early election may be called for September or October in order to shore up the government’s backing in Parliament.
Recent polls suggest Syriza would win more seats now than it did in January’s election.
Interior Minister Nikos Voutsis said Thursday that Parliament’s voting on the final bailout agreement would be a decisive test for party unity.
“I cannot understand how our own MPs, who have voted No three times, can say they still support the government,” Voutsis told local television, adding that “all the options are on the table” with regards to possible elections.
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