Our Opinion: 2015

The latest on Greece

The Greek authorities scraped enough money together to meet a payment due on 9th April 2015 to the International Monetary Fund (IMF). They say they can also cover a similar bill next month when a six-month bond expires. But, without more bailout money from Europe and the IMF, it will go broke in May.The latest Greek reform proposals, designed to unlock the cash, have been cooly received. The spectre of the Greek exit from the Eurozone – the Grexit – continues to haunt Europe.

Hugo Dixon said on Reuters this week that the populist left-wing government “has pretty much exhausted its techniques for squeezing blood from a stone.” He said that it had also wasted the past two months “lecturing its creditors, sending out mixed messages about its willingness to default and coming up with amateurish overhaul plans.” Early reform ideas included wiring tourists up to act as temporary tax inspectors.

This time, the Financial Time reported that Greece’s list was “at least fuller and more rational” with a mix of the “useful… and counterproductive.” Privatization will continue but tax avoidance plans are projected to raise completely unrealistic amounts of revenue, and the Government wants “to backtrack on labour market reforms.”

Prime Minister Alexis Tsipiras visited Russian President Vladamir Putin this week. The Times considered this a “culpably naïve” and provocative step that risked aligning Greece with a country that violates “European standards of justice and constitutionalism.” Russia’s own severe recession means any financial situation would be fairly limited anyway.

It won’t be long before the Greek banking system runs out of money and the economy grinds to a halt. In some ways, as I have written before, I would welcome that. It will force a resolution to end some miserable years for Greece, rather than yet another short-term measure that prolongs the agony. Regardless of the affect such a resolution would have in Greece, Jeremy Warner in the Sunday Telegraph warns that it will not be Greece – but European Monetary Union that will be “more weakened, unstable and lacking in credibility than it already is, if that was indeed possible.” He concluded that this affair is looking “ever less likely to have a happy ending.”