Are eurozone leaders resigned to a Greek tragedy?

Yesterday's meeting of finance ministers tightened demands on Greece to approve a bailout package. But it may be too late.

by Emma Haslett
Last Updated: 06 Nov 2012
What a difference a day makes, eh?. Yesterday, we left Greek finance minister Evangelos Venizelos tripping off to a meeting with his eurozone counterparts full of beans, mainly because he’d been given a 15-day extension to the deadline to approve austerity measures so Greece can get hold of a €130bn bailout package. Today, things aren’t looking quite as rosy. We rejoin our hero 24 hours later, having been issued a stern warning by the eurozone’s Council of (finance) Elders, led by Luxembourgish PM Jean-Claude Juncker: get to work, or else.

Weighing heaviest on Venizelos’ mind will be the fact that leaders at the meeting decided to reduce his deadline to just before their next meeting on Wednesday. That gives him five days to approve the terms of the package of cuts the EU and International Monetary Fund want implemented in order to approve the bailout deal, find €325m in budget cuts, and promise that all the new austerity measures will definitely be implemented. True to form, Greek unions called a 48-hour strike, starting today, before they even knew what the new measures entailed...

That led to Venizelos hitting out at his right-wing coalition partner Antonis Samaras. After much negotiation, he had approved 15,000 public-sector job cuts, liberalisation of labour laws and even the 20% cut in the minimum wage – but wavered when it came to reforming the pension system, a key requirement by the troika. That was too much for Venizelos: ‘the conservative party must decide – if they want to stay in the eurozone, they had to say to clearly,’ he raged. Eeek.

What’s interesting is that there are apparently whispers among eurozone leaders that it may finally be time to abandon Greece to its fate. If, by March 20, it hasn’t met the terms of the bailout, as set out by the ‘troika’ of the IMF, EC and European Central Bank, it will be forced to default on its loans. The official line is, of course, still that  Greece has to be saved. But we sense increasing dissent among the ranks...

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