How effective will the new aid for Greece be?
The decision to give Greece new bailout loans is based on a compromise: the debt relief on which the IMF has made its continued participation in the bailout programme contingent but which Germany rejects won't be decided until 2018. The next crisis has simply been postponed, commentators object, speculating that the upcoming elections in Germany are the reason for this delay.
All just about German politics
The postponement of debt reduction for Greece shows that Germany's next federal elections are more important than rescuing Greece, Corriere della Sera fumes:
“The Euro Group and the International Monetary Fund have used plenty of make-up to conceal the deferment of vital decisions: namely the revision of the unrealistic and oppressive budget targets for Athens and a reduction of the debt that Greece clearly cannot repay. In private everyone admits this. Even [German finance minister] Wolfgang Schäuble. ... Nevertheless in public and in the Euro Group Schäuble has said he has no plans to make any concessions before 2018 because Germany will vote in 2017 and his party would pay dearly for any compromises vis-à-vis Athens. Pressure from the IMF is of little use here. So clearly Brussels is far more concerned about German politics (without mentioning this by name) than about Greece.”
Political opportunism rules the day
The EU won't solve the real problems by giving Greece a few more billions, writes the Neue Zürcher Zeitung:
“Once again political opportunism has won out in the Greek state finances crisis. The money will keep flowing; the appearance that the situation is somehow under control will be preserved; and the question of debt sustainability won't be properly addressed for another few years. So Europe will be spared a hectic round of diplomacy this summer. … But the postponement of another summer theatre does not mean either the creditors or the debtors can now sit back and relax. If you've mastered the four basic arithmetical operations you soon realise that Greece will never be able to fully repay its debts. Anyone who claims the contrary is basing their calculations on unrealistic assumptions, for example an absurd amount of budgetary discipline.”
Hovering between life and death
Greece will receive a bailout loan of 10.3 billion euros in exchange for its most recent austerity and reform package. The eternal interaction between austerity and financial aid is being maintained, To Vima complains:
“The compromise between Schäuble's goals and those of the IMF gives us a little reprieve but it still leaves us hovering between life and death. The money will be paid out in instalments, and the same applies for the debt relief. At the same time we are waiting to hear which additional austerity measures will be necessary to keep the money flowing. … It's clear that he EU partners and the IMF still don't trust the Greek government even though it has passed a very painful package of measures. … So they are calling for additional conditions - and this is unbearable for any democratic country.”
Non-stop austerity is choking SMEs
The Euro Group has praised the Greek government's austerity and reform programme but this won't do any good, De Volkskrant complains:
“For years the creditors have tried to force a succession of Greek governments to implement reforms. But every Greek government knows that the money supply won't be cut off as long as it sends a minimum of correct signals. So the Greek parliament keeps on swallowing 'painful measures' and the creditors keep on pulling out their wallets. … But the small and medium-sized businesses and the people are those worst hit by the tax hikes and this is destroying the tentative economic recovery.”
A new chance for Greece
Finally Greece is receiving real help, the business daily Il Sole 24 Ore comments jubilantly:
“The Eurozone is to submit to a process of debt revision. This will entail step-by-step mechanisms to ensure that the criteria a country must meet aren't rendered ineffective. So the measures are less generous than the debt relief demanded by the IMF. But they must produce a solution and avoid the uncertainty of the last few years. Because precisely the tactic of 'delay and pretend' has had tragic consequences for the Greek economy and society. With a secure mechanism for debt relief in place the ECB could buy Greek bonds [they are currently excluded from the bond-buying programme]. For the first time in seven years the Greek economy would have a chance for the future.”
Debt relief cannot replace reforms
Concessions cannot be the order of the day as long as Greece's economy remains so weak, Der Tagesspiegel complains:
“The country must put itself on the road to growth before debt relief becomes absolutely essential in the next decade. The planned relief cannot constitute an alternative to the necessary structural reforms to which Greece committed itself in return for the current third bailout programme, including further liberalisation of the job market. ... In addition, no solution has been found to the basic problem in Greek politics - the far too narrow tax base. This problem is highlighted once more by the Greek parliament's most recent resolution on an austerity package which stipulates high taxes for the broad masses - food, petrol and Internet connections will all become more expensive. With these tax hikes Tsipras took the path of least resistance.”
Greek drama not over by a long shot
Even if everything points to an agreement in the debt crisis both sides still have a long way to go, Delo predicts:
“There will be no breakthrough until all parties start talking openly. Prime Minister Tsipras must make it clear to the Greeks that debt relief is not a magic wand with which all of Greece's problems can simply be eliminated. And that the other EU states can't pay for Greece's pensions. As for the lenders, they must come to terms with the fact that Greece will be financially dependent on them until the basic conditions have been created in which the country's economy can develop on its own.”