Review and debt negotiations: the difficult issues government must deal with

Author: newsroom  | Published: September 8, 2014

The government needs a positive answer on debt sustainability to ensure political stability and avoid early elections

The statements of Prime Minister Antonis Samaras at the Thessaloniki International Fair opening ceremony included some facilitations for the citizens in order to reverse the negative political climate while trying to be consistent with the current Greek program.

However, the government estimates that the first step towards a climate reverse has been done and that they will recover the lost ground. The positive review of the Troika at the end of September is a prerequisite to start the negotiations for the debt relief and the government believes that when the Greek debt is officially declared sustainable, things will change radically for Greek economy, since there will be more sources of borrowing and liquidity and the presidential elections will not pose any risk for possible early elections.

The Prime Minister said at TIF that SYRIZA will not succeed to trigger early elections by blocking the election of President of the Hellenic Republic.

However, as negotiations in Paris showed, things are not easy for the government. The Greek delegation faced many difficulties in Paris which was proved by cautious and limited announcements of the content of the discussion. The two sides simply agreed to disagree and that they have still a long way. The government did not get the “green light” to announce great facilitations and relief measures and since at the end of the month Troika will review the Greek program, the Prime Minister did not want to proceed to unilateral announcements that would create a negative climate. The government might be forced to review again the financial data of 2015.

The negotiations on the debt, though, will be crucial and will significantly determine the future of government.

The government needs a positive answer on debt sustainability to ensure political stability and avoid early elections. Up to now the lenders have set as a condition a clear political scene in order to move on with the debt adjustment. This is why Antonis Samaras attacks SYRIZA and says that early elections would be catastrophic for the country.