What next? More twists and turns ahead for Greece

[webfact]

What next? More twists and turns ahead for Greece
By DAVID McHUGH

FRANKFURT, Germany (AP) — Greece's bailout deal isn't a deal — yet.

It only becomes one if Greece meets tough conditions, like quickly passing a slew of far-reaching economic reforms, cuts and privatizations.

After the Greek government dismayed creditors by repealing some economic measures and dragging its feet in negotiations, key lender states led by Germany took a hard line: Reforms first. Money afterward.

Whether the deal will then steer the Greek economy back to health and help it lower its debt remains uncertain.

"Doubts and concerns in our view outweigh optimism and euphoria," wrote Carsten Brzeski, chief economist at ING-DiBa in Frankfurt. "It starts with the fact that there actually is no deal, yet. It's a declaration of intent."

He recommended "that the champagne bottles should still remain in the fridge for a while."

Here's a look at Greece's situation.

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WHAT'S THE NEXT STEP FOR GREECE?

Under the deal struck with creditors during an all-night meeting in Brussels, the Greek parliament must approve by Wednesday key reforms. They include VAT tax increases and pension cuts, and safeguarding the full independence of Greece's statistics service, which at the start of the crisis in 2009 was found to have woefully misstated the country's finances for years.

More reforms have to be passed by July 20, including a new civil code that should streamline legal proceedings and lower business costs.

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WILL THAT HELP GREEK BANKS REOPEN?

That's the intent.

Greece's banks have been closed since the European Central Bank refused two weeks ago to allow them to draw more emergency credit. Once the legislation passes and Greece gets closer to financial rescue, the ECB may decide to permit more credit. It could do that anytime it can say a bailout deal is in the offing, but may wait until Thursday's meeting of its governing council — the day after the first Greek vote.

An increase in credit could enable the Greek banks to reopen and perhaps increase their withdrawal limit of 60 euros per day.

But analysts say some kind of limit on cash withdrawals and transfers will likely stay in place for months.

The closed banks have made normal commerce impossible and worsened the recession. Getting them open again is a top priority if the Greece economy is to recover.

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AFTER THAT, WILL GREECE GET ITS BAILOUT?

Not yet. Germany's parliament must also approve the start of negotiations, which officials said could happen Friday. Austria and France will also hold votes on the preliminary agreement.

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WHAT HAPPENS WHEN NEGOTIATIONS START?

Once Greece passes the reform laws, the institutions monitoring its finances — the European Union's executive Commission, the International Monetary Fund and the European Central Bank — will get a mandate to start talks. The Greeks will have to make more reforms, such as opening up closed professions, easing worker protections in labor law, and privatizing the national electricity grid.

They will also have to transfer government-owned businesses and assets into an independent privatization fund that will sell them off.

And the eurozone says that's just to get the talks started. At the end of the process, national parliaments have to sign off in Germany, Estonia, the Netherland, Finland, Austria and Slovakia. Only then can Greece tap the money from the bailout fund, the European Stability Mechanism.

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HOW FAST CAN GREECE GET THE MONEY?

The creditors acknowledge that time is short and that a full bailout deal worth between 82 billion euros and 86 billion euros over three years must be struck quickly.

Greece needs 7 billion euros by July 20 to cover its bills and debt repayments, and an additional 5 billion euros by mid-August. It's already in arrears on a 1.5 billion euro payment to another important creditor, the IMF, and needs to clear that before it can get more IMF loan money.

Eurozone countries were discussing whether to help Greece meet these obligations with a short-term bridge loan.

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WILL THAT STABILIZE GREECE?

Even after it gets any loans, the country faces more uncertainty as its economy will be in bad shape. Whether the reforms will help get the economy going, and how fast, is not clear. Some economists think Greece's debts are too big to repay.

Meanwhile, the tough reforms attached to the loans could force the current left-wing Greek government from office.

The bailout deal will face opposition in the ranks of deputies belonging to Prime Minister Alexis Tspiras' Syriza group. Tsipras will likely have to resort to opposition votes to get the painful spending cuts and economic changes through. That could cost him his government majority in Greece's parliamentary system, and a new coalition and prime minister could soon be in place, analysts say.

The country's labor minister said Monday that the country could see new elections by the end of the year.

So hold on. It's not a deal until it's a deal.

-- (c) Associated Press 2015-07-14

[Credo]

It's a deal....it's not a deal....it's a deadline....it's not a deadline.

I think that Greece is holding the entire EU as a hostage. My cat has more mercy for a mouse than Greece has for the EU.

Just who is running the show?

[EnglishJohn]

Like I have said many times, there is no way Germany will let countries leave. We have no idea what has been promised behind the scenes : it is all one big dirty game played with taxpayers money.

It's not about the people, it's about power for the politicians on the world stage.

Greece let it's people vote in a referendum and then went against the result. Democracy in action ... NOT.

It's clear the government were playing a game of chicken right down the line. And the losers (as always) will be the EU citizens who have no choice but to fund this massive white elephant. In the UK, we never got asked if we wanted this.

[ABCer]

Everybody knows what's next for Greece - exactly what was before.

Nothing has changed, except that the debt has increased.

Not only Tsipras is a Commy, not only he is a National traitor (aren't they all?)

But this time a big chunk of Greece's National Assets will be given away at the end-spiel.

Wonder what is his 'cut'?

INMH and if I were a Greek i I would say: "Let it happen here and now". Why wait for future turns and twists?

Edited July 14, 2015 by ABCer

[blazes]

Credo asks, "just who is running the show?"

The answer is right there in the amazing demands of the "creditors"....all the hi-so of Europe who eagerly funded the Greek black hole (brought about by decades of fascist corruption) are demanding that the "debt" be repaid as follows:

The Greeks will have to make more reforms, such as opening up closed professions, easing worker protections in labor law, and privatizing the national electricity grid.

They will also have to transfer government-owned businesses and assets into an independent privatization fund that will sell them off.

How to conquer territory without firing a shot. Who's next?

[winstonc]

Everybody knows what's next for Greece - exactly what was before.

Nothing has changed, except that the debt has increased.

Not only Tsipras is a Commy, not only he is a National traitor (aren't they all?)

But this time a big chunk of Greece's National Assets will be given away at the end-spiel.

Wonder what is his 'cut'?

INMH and if I were a Greek i I would say: "Let it happen here and now". Why wait for future turns and twists?

i would put my pension on you crying if you were a greek,being asset raped by those vile unelected filth in the eu...tsipras has been pm for 6 months this has been going on for years he was voted in ..dont you like democratic results they did invent it after all.......

[h90]

Like I have said many times, there is no way Germany will let countries leave. We have no idea what has been promised behind the scenes : it is all one big dirty game played with taxpayers money.

It's not about the people, it's about power for the politicians on the world stage.

Greece let it's people vote in a referendum and then went against the result. Democracy in action ... NOT.

It's clear the government were playing a game of chicken right down the line. And the losers (as always) will be the EU citizens who have no choice but to fund this massive white elephant. In the UK, we never got asked if we wanted this.

We in Austria got asked.....And got promised everyone gets a thousand Schilling extra....."Eder Tausender".

Obviously we got only poorer.

[TheAppletons]

Everybody knows what's next for Greece - exactly what was before.

Nothing has changed, except that the debt has increased.

Not only Tsipras is a Commy, not only he is a National traitor (aren't they all?)

But this time a big chunk of Greece's National Assets will be given away at the end-spiel.

Wonder what is his 'cut'?

INMH and if I were a Greek i I would say: "Let it happen here and now". Why wait for future turns and twists?

i would put my pension on you crying if you were a greek,being asset raped by those vile unelected filth in the eu...tsipras has been pm for 6 months this has been going on for years he was voted in ..dont you like democratic results they did invent it after all.......

It's entirely possible to be a fan of the democratic process but be displeased with the result of a given vote. Difficult to feel sorry for people when they elect a stupid government.

[soumanioco]

You really can't tell what's going on in Europe?

Literally like worms to be squashed did Chancellor Merkel treat the Greek government, the Greek Parliament, the Greek people. ... Only 48 hours (!) margin gave Merkel to Tsipras to vote in parliament bills that drastically reduce pensions and increase VAT to a huge number of products and services, thus increasing the cost of survival and living in a Greece that the population's income is collapsing increasingly. So flouted the Greek government and the prime minister. "We will withdraw the decisions of the House" announced the Chancellor of Germany, meaning many decisions of the Greek Parliament that Berlin does not approve of, deliberately targeting and vilifying the country's parliament. Besides, from now on, the Greek Parliament will only pass laws that have been pre-approved by the German Chancellor, as befits a miserable province of the Fourth Reich!

[TheAppletons]

You really can't tell what's going on in Europe?

Literally like worms to be squashed did Chancellor Merkel treat the Greek government, the Greek Parliament, the Greek people. ... Only 48 hours (!) margin gave Merkel to Tsipras to vote in parliament bills that drastically reduce pensions and increase VAT to a huge number of products and services, thus increasing the cost of survival and living in a Greece that the population's income is collapsing increasingly. So flouted the Greek government and the prime minister. "We will withdraw the decisions of the House" announced the Chancellor of Germany, meaning many decisions of the Greek Parliament that Berlin does not approve of, deliberately targeting and vilifying the country's parliament. Besides, from now on, the Greek Parliament will only pass laws that have been pre-approved by the German Chancellor, as befits a miserable province of the Fourth Reich!

I will be happy to have Angela Merkel treat me like a worm to be squashed if she gives me $86 billion euros. No problems there.

[ggold]

Reading the OP it seems that Greece would be just as worse off if they left the Euro, as staying in it! Tsipras must have been given a good promise for him to turn against all he said prior to the referendum? Now we will have to see what happens in the Greek parliament, will there be a revolt from his own party and coalition partners enough to reject these terms, or is it a done deal with the support of the opposition?

My guess is he will be forced to resign, and maybe there will have to be an election, Which will delay this process. Or will he have an 11th hour change of mind yet again.

Greece should leave the Euro, if not they will have years of pain under the control of the Germans!

[Basil B]

Wot!!! 24 hours and no back peddling yet???.

[Srikcir]

If the Greek parliament doesn't pass the laws to implement the deal between the EU and Tsipras, Greece is out of the EU.

There will be only Tsipras, his party and the Greek majority to blame.

Democracy didn't die but comes the grim reaper of accountability.

The only remaining question will be how many drachmas will get an euro dollar?

With an almost 9% inflation rate added to debt and stagnant domestic economic growth, I estimate a 40+% devaluation. It will be little consequence to the Greek people that the Grekexit will lower the value of the euro dollar to other global currencies like the USD.

[siam2007]

this country is not willing to change its Tax-evading lifestyle.

They have lived comfortably off the money of hard working Tax-payers from other European countries.

And they will continue to do so !

[pedro01]

Greek PM Tsipras says: "Lenders (Germany & ECB) give a message that in countries under a bailout there is no point in holding elections."

Nice.....