Friday, May 29, 2015

Greece: the agreement with creditors is it a mirage? – L’Express

Well, no, not yet. While Alexis Tsipras announced midweek imminent agreement with its creditors, the Greek enthusiasm was dampened by the European Commission, such as the IMF. “We have not arrived yet, there are open questions to be resolved,” said Thursday the spokesman of the Committee for Economic Affairs. “It is very unlikely that we reach a comprehensive solution in the coming days,” said IMF chief Christine Lagarde. About tempering of a much more explosive secret to Frankfurter Allgemeine Zeitung , that a “Grexit” was “possible” and does not mean “the end of the euro”. Tchuss , Greece?

The IMF wants to recoup

Time is short. In a week, June 5, Athens must repay € 300 million to the IMF. Then 336 million 12, 560 and finally 336 16 19. The € 1.6 billion in all. If, according to several European sources quoted by AFP, the first payment would be honored scraping the bottom of the barrel is not the case of those that follow. There is one month, Christine Lagarde ruled out any postponement of payment. The release of 7.2 billion euros of the last tranche of the aid plan for Greece is indispensable to avoid a default, prior to a possible exit from the euro.

The parties have agreed “on most issues,” the Greek Finance Minister Yanis Varoufakis. But the yawning gap remains on others: pension reform, VAT, and definition of a primary budget surplus, in particular. The increase in VAT must be Parisian not to discourage consumption, particularly in the Greek islands living from tourism. More annoying, the European Commission and the IMF are not on the same wavelength. The IMF is a short-term lender, who wants to quickly recover its funds. According to Le Monde , the IMF wants the retirement to 67, against 65 for the Commission, while the Greeks offer 62 years. The IMF demands for 2015 primary budget surplus higher than the Commission, which would merely 1% of GDP. Given a continuation of austerity, when the government of Syriza has vowed to end.

From the advantage of default

How a deal would it be possible even if the creditors do not have the same goal? “To find an agreement, it is necessary that Athens still make efforts, but also that the IMF lost ground,” tells the World a source close to the negotiations. In this perspective, the threat of default is a good weapon to stay in the euro. A goal that all stakeholders, including the IMF, are still officially attached, as is the majority of the Greek population.

“Do not pay the IMF on June 5 could be the best thing that could happen to Greece”, even argues economist Christopher Dembik Saxo Bank in an analysis notes: “It is sometimes the chaos that can occur with solutions. ” Indeed, the IMF has one month to declare a default country after finding that has not been repaid. An ideal window to reach agreement urgently. According Yanis Varoufakis, the real deadline expires “on June 30, when futures happens the extension of the bailout plan.”

Within two years of debate

Christopher Dembik same repels maturity in July, when Greece will have to repay $ 3.5 billion to the ECB. “We are moving towards a minimum agreement that will leave aside the most controversial issues,” he predicts for L’Express. But without global agreement, “the Greek problem is likely to stay still vivid for at least two years.” In this horizon, a change of majority in Germany could indeed pave the way for a new restructuring of Greek debt, the only way to revive the economy.


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