00:44 GMT14 August 2020
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    Greece's Gordian Knot: Syriza Tackles Austerity (404)

    The Greek public will go to the polls Sunday to vote for or against the international creditors’ demands for spending cuts and tax hikes in exchange for financial support.

    MOSCOW (Sputnik) – With the polls projecting a ‘Yes’ vote ahead by a 1-percent margin, the outcome of Sunday’s referendum and the creditors’ subsequent actions are up for grabs. Compounding the problem are mixed messages coming out of the creditors and Greek government camps.

    The Good

    With the missed Tuesday deadline to repay the International Monetary Fund (IMF) $1.7 billion, European and IMF negotiators kept the door open for talks to continue. In the latest signal on Friday, German Finance Minister Wolfgang Schaeuble told local media new talks could take place “on a completely new basis and in a more challenging economic environment.”

    Greek Finance Minister Yanis Varoufakis said negotiations were still continuing, going as far as to say the Hellenic republic “more or less” reached an agreement with its lenders.

    Also on Friday, Greece’s biggest creditor, the European Financial Stability Facility (EFSF), said it will not immediately call for a repayment of $160 billion from Athens in what it dubbed the “Reservation of Rights.”

    The Greek Bailout Fund crowd-funding campaign launched by a British shoe shop worker to help rescue the Greek economy passed the 1.68-million ($1.86-million) mark in six days. With four days left, the website’s goal is to collect a minimum of3 from each of the European Union’s 503 million residents to collect the $1.7 billion Greece needed to repay the IMF.

    The Bad

    US President Barack Obama said at a press briefing Tuesday that a possible Greek default will unlikely impact global financial markets in a major systemic way, but will affect European and global growth.

    The Hellenic republic joined the short list of countries, including Sudan and Zimbabwe, to have effectively defaulted on the IMF after its latest round of negotiations with lenders broke down last weekend.

    The country’s finance ministry said Greek banks have sufficient liquidity to last until Tuesday, after the ECB instituted measures to keep the level of emergency liquidity assistance to Greek banks.

    Matteo Salvini, head of Italy’s right-wing Lega Nord political party, told Sputnik on Thursday that “Brussels’ house of cards will face serious repercussions” in case of a possible Greek exit from the Eurozone.

    Greek Prime Minister Alexis Tsipras is banking on that assessment, hoping the damage to Europe that a Grexit would cause will give his side leverage with creditors.

    The Ugly

    The situation on the ground, however, turned bleak later on Friday when pro-‘no’ vote demonstrators clashed with police in central Athens.

    Earlier, a group of activists stormed a supermarket on the outskirts of Athens, taking food off the shelves and handing it out to people.

    Early Retirement

    Christoforos Vernardakis, secretary general on government work coordination, said Friday the Greek government will be forced to resign if a significant majority of Greeks vote in favour of foreign lenders’ demands.

    Vernardakis echoed Finance Minister Yanis Varoufakis’ comments the previous day of a possible government resignation in the event of a ‘no’ vote on Sunday.

    Tsipras appeared vindicated by the latest IMF analysis assessing Greece’s $350-billion national debt unsustainable. He reiterated the need for a 30-percent write-off of the Greek debt and a 20-year grace period.

    Seed of Discord

    With Tsipras’ administration actively campaigning for a ‘no’ vote, European leaders warn that outcome would result in Greece losing an advantage in any upcoming talks with creditors.

    The signal that the referendum sends is another source of disagreement between Athens and Europe. Tsipras argues the plebiscite is not a vote on Greece’s membership in the 19-nation Eurozone, while European leaders warn the Greek public of the opposite.

    Varoufakis’ earlier claims of ongoing talks were also shut down by European leaders, with Eurogroup President Jeroen Dijsselbloem being the latest to bring home the point, saying Europe is strictly awaiting the results of Sunday’s vote.

    Greece's Gordian Knot: Syriza Tackles Austerity (404)


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    austerity measures, bailout, default, loan program, debt, Syriza, The European Central Bank (ECB), International Monetary Fund, European Financial Stability Facility (EFSF), European Union, Eurozone, Yanis Varoufakis, Alexis Tsipras, Athens, Greece
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