The Status Quo:
Greece’s international creditors have agreed to disperse another $8.7 billion US dollars in bailout funds in return for promises to continue reforms.
The “troika” of the European Central Bank (ECB), the European Commission (EC), and the International Monetary Fund (IMF), said they saw some growth in the near future, but warned the nation’s reforms are moving too slowly.
Thousands of Greek municipal workers and school teachers took to the streets, protesting plans to put reduce the salaries of 25,000 civil servants before firing or redeploying them.
The Quo Vadimus:
Greece’s creditors have come to the rescue again, but the continued “month by month” aspect of this relationship is continuing instability.
Splitting out this tranche of bailout funds across 3 payments is insanity. It’s bad enough the bailout is stretched across “will they-won’t they” deliberations, doing the same with a single tranche does not help.
Greece is moving slowly with the “reforms” being required by their creditors.
In a nation with 27% percent unemployment, perhaps it’s time we think that delays in firing more people aren’t the worst thing that could happen.
Many have railed against the conditions being forced upon Greece and other small European nations, so complaining now won’t change it, but the big thinkers in the Troika need to be more creative in the future.
The political instability in Greece, exemplified in the scuffle over the state broadcaster, is hurting Greece with investors and creditors and sapping any power they can bring to the negotiation table.
Everyone will declare victory and relief for about 2 days. The staggering of this round of bailout funds will ensure an even faster than normal return to “Greece on the brink of collapse” stories.
Europe hasn’t been able to let Greece fail in the past and it still can’t afford to now. So ignore the side show- Europe will continue the bailout and the workers of Greece will continue to be unemployed.