Athens floating on the abyss – THE WORLD

Seven years crisis in Greece Seven years reforms and austerity programs. Upward it nevertheless does not go. Under pressure from donors, the Greek Government of Alexis Tsipras is now planning the next austerity measures.

It is already clear that this will not be enough to Euro Partners , Given the impending cuts, the Greek unions have paralyzed on Friday with large-scale strikes the land. Also not for the first time. Conversations with Greeks today are often enjoyable. “Greetings from the land of the lost,” wrote a colleague from there in a recent e-mail.

It is not progress in Greece. And people feel it. The economy is not growing, unemployment remains very high. The Greeks push the last but not least on the tough reforms of donors. The turn blame it on the lack of will to reform in Athens. It is a story that barely wants to hear an outside Greece.

Even the strike, because of which not leak most ferries in the Aegean that the hindering rail transport and bring the transport in major cities to a halt, interest outside the country at best tourists. In the land but that is just different. On Sunday evening, Parliament will adopt further austerity measures. Among others, the pensions will be reduced by a total of 1.8 billion euros. More tax increases must again bring 1.8 billion euros in the budget.

The Industry Federation of the private sector GSEE described the cuts as “grave stone” of the pension system. Who retires from Monday should get up to 30 percent less money, it said. The civil servants’ union ADEDY called it a “raid on pensions” and called for resistance. Pension cuts affect in Greece particularly dramatic.

Unlike in Germany, For example, there are after prolonged unemployment for social assistance for people living in Greece. Whole families therefore live on the pension of grandparents. If the pensions were cut, has the often harsh social consequences for those affected.

Whether and how long Premier Tsipras further austerity packages since the donors are not satisfied with the extent of pension cuts

politically – In Greece the necessary resolutions are therefore very controversial. survives, is a question that not only make the Greeks. The financiers do not know whether the man with whom they are negotiating today, in the coming weeks governed. But this is problematic – for the country, for Europeans and for the International Monetary Fund (IMF). For long run the cleavages not only between the creditors, including the IMF on the one hand and the debtor Greece on the other side. Between the donors themselves, there are now deep differences over the nature and extent of the new reforms.

Outside Germany believes hardly an economist that further austerity measures worth more than four percent of economic output will help the Greeks to get back on their feet. Even the IMF, which is considered the toughest renovators of bankrupt states, is skeptical. In Washington, the view has prevailed that austerity measures in the periphery, as required by the federal government, not permanently endure still is the economic recovery beneficial.

Still in the auxiliary Agreement of last year, the creditors had agreed that the Greeks have to generate a primary surplus of 3.5 percent of GDP over time. The reason:. Such a surplus would reduce the Greek debt in a period to a sustainable level, which is just acceptable to the IMF

is only paper just patiently. What good are beautiful figures in an agreement if the country can either fail to comply or, even worse, if it could harm the economy, as in Greece? “Three and a half percent primary surplus for many years, as laid down in the planning, only provide very few countries. And even those with a stable political system”, it therefore was recently in Washington. IMF chief Christine Lagarde therefore now wrote a letter to the finance ministers of the euro zone. For the first time the letter is a declaration of war on Germany. Lagarde urged the Finance Minister to take immediate negotiations on debt relief for Greece. They also ask to relax the austerity rules. The last bailout prescribed target of a primary budget surplus of 3.5 percent of GDP is unrealistic and should be significantly reduced.

The budgetary target for Greece should a primary surplus of 1.5 percent instead of the previously scheduled 3.5 percent be reduced, Lagarde calls now. “There is no doubt that this higher goal is not only difficult to achieve, but possibly also counter-productive”, says’ The Financial Times “in the letter. It should be in the national interest, but also make the donors honest.

With the honesty but that in the case of Greece is such a thing. The German government of Angela Merkel has been set from the beginning that there must be aid to Greece only if IMF involvement.

Meanwhile regulations but write finds that he can only access one country financially under the arms, if it is able to take in the near future its debts. And therein lies the crux. If the primary surplus lower than the agreed 3.5 per cent of the debt fall too slow. Should the IMF still help you, the creditor would have to adopt the Greeks some of their debts.

Germany refuses,. In this country debt relief could be politically difficult to convey. For years, they had the Germans promised that the government would bring back the Greeks borrowed money. A waiver is not an option now. Also, because the Euro-hostile Alternative for Germany (AfD) politically powerful At length. If the IMF does not want to soften its debt criteria, the Greeks should provide just 3.5 percent excess.

For months, negotiations revolve between European donors, the IMF and Greece at exactly this crucial point. In the meantime they had devised a way out. To meet the requirements of the IMF, the Greeks are to decide a kind of stock Austerity. Saving measures amounting to two percent of economic output to be automatically put into effect, if the country does not meet the agreed specifications.

What will be agreed at the end, is still open today. Some observers in Greece believe that the country quickly takes the next aid from the third aid package so that it is not insolvent again. Other experts, especially in European capitals, on the other hand assume that may drag on the talks until June, even in July. “Our experience of recent years shows that the government in Athens gives always only when nothing else will work,” it said in negotiating circles. And that might be the case no later than July, when Athens must repay the bond debt.