Greece continues to abandon campaign promises while standing fast with its bold claim that it is rejecting austerity and keeping its red lines. Tsipras called a parliamentary session Monday that was set to run 70 minutes but took over four hours. While the reform terms are still in flux, Greece has already given up on holding back on privatizations (it has them in its budget, projecting €1.5 billion from them this year), looks to be ready to cave on the unpopular property tax, Enfia, which Syriza attacked during its campaign, and has evidently given up on the campaign promise of a minimum wage increase. On the last issue, the government is now saying simply that it will not implement labor market liberalization. It has thus retreated to trying to fight the Troika to a standstill on labor market “reforms,” which mean reducing labor bargaining power.
Tsipras said he would achieve an honorable compromise. But that has far too much of a “peace with honor” sound about it. Despite the government’s repeated claims that it is rejecting austerity, it conceded on that issue long ago when Yanis Varoufakis said Greece would achieve a primary surplus of 1.0% to 1.5% of GDP and would continue to run primary surpluses. A government surplus is dampening even in the best of times; during a depression, it guarantees that the economy will get worse.
At best, all Greece will have achieved is trading austerity for austerity lite. But with the primary surplus targets it has set, it may not even achieve that much in the way of lessening of its pain. The main impact will likely be to shift more of the burden to the wealthy, and Greece may also get some humanitarian relief from the EU to improve the optics and assuage the creditors’ consciences (at least for the ones that actually possess them). That is not a meaningless outcome, but it clearly falls short of what Tsipras is trying to convince his coalition members and the Greek public that he will obtain. them.Oddly, the always excellent Yves Smith does not mention Tsipras' scheduled trip to Moscow next week, a story covered by NYT's Liz Alderman, "Greece Looks to Russia as Deal With Europe Stumbles":
With tax revenues falling quickly, Greece will be hard pressed to pay €450 million owed to the International Monetary Fund on April 7, the day before Mr. Tsipras’s visit to Moscow.
Most top Greek government officials have rejected suggestions in recent weeks that they might turn to Russia for aid. But others have courted the idea publicly, including Panos Kammenos, Greece’s defense minister. Greece could seek financial help from Russia, China or the United States as a “Plan B” if Germany “remains rigid and wants to blow Europe apart,” he declared last month.
Russia’s foreign minister, Sergei Lavrov, has said that Moscow would consider a Greek request for aid if one is made — an offer that the Russian ambassador to Greece repeated in an interview with a Greek newspaper over the weekend.
On Monday, the Greek energy minister, Panagiotis Lafazanis, traveled to Moscow to meet with his Russian counterpart and the chief executive of the Russian energy giant Gazprom. As he prepared to leave for Moscow, Mr. Lafazanis lashed out at the European Union and Germany for “tightening the noose” around the Greek economy.
Last month, Donald Tusk, the president of the European Council, said in an interview that Mr. Tsipras had assured him he would not be a “troublemaker” over European policy toward Russia.
But few people have forgotten how the new Syriza-led government in Greece, just days after it was elected in January, denounced European Union sanctions against Russia over Ukraine. The move took European Union leaders by surprise and threatened to upend Europe’s policy toward Moscow. Facing pressure, Athens quickly reversed its position and joined other countries in a unanimous vote to continue sanctions for Russia.
Still, some officials in Brussels saw Greece’s flip-flop as a bargaining ploy to win concessions from European Union creditors over the terms of Greece’s bailout package. Athens has also talked of turning to China for help if need be.
On Friday, Deputy Prime Minister Yiannis Dragasakis met with Vice Premier Ma Kai in Beijing, where both men pledged to strengthen ties between the countries. Mr. Dragasakis also assured Beijing that the Chinese state-run shipping company Cosco could move ahead with a tender for a 67.7 percent stake in Greece’s Piraeus Port Authority, one of the most strategic ports in southern Europe.
Even if Greece were eventually to seek financial assistance from Moscow, Russia’s economy is under pressure amid a collapse in oil prices and the lengthy conflict in Ukraine. It is expected to contract by at least 4 percent this year. While the ruble has been rising in recent days — and the sense that the Kremlin may be getting things under control is increasing — Russia may think twice if Mr. Tsipras were to seek large sums of financial aid, especially if loans risked not being repaid any time in the foreseeable future.
“Moscow could provide a little bit of funding to tide over the Greeks,” Mr. Tilford said. “But it is not in a position to provide the kind of money that Greece would need to stay in the eurozone.”
Greece’s European partners have suggested Athens may need to apply for a third bailout this summer, before an additional €7 billion worth of debts to the I.M.F. and the European Central Bank come due. Any new package could be in the tens of billions of euros, and would most certainly hinge on a string of harsh conditions that Greece would rather avoid.
In the meantime, the haggling between Athens and Brussels continues. Greece and its creditors were expected to discuss the latest reforms on Wednesday, although no conclusion is expected during the Easter holiday on whether they will be sufficient to unlock cash.Students of history -- Russians are better students of World War Two and the Cold War because their sacrifices were exponentially more immense than those in the West -- know that the Cold War began with the Truman Doctrine and the intervention of the UK and U.S. in the Greek Civil War to crush the Greek Resistance. Stalin stood aside and let the Democratic Army of Greece bleed out. Now Putin -- at a cost far lower for present-day Russia than the Soviet Union post-WWII (and Western governments commanding far less popular support) -- can right a wrong, aid the Greek people and simultaneously create a great deal of difficulty for the EU and NATO.