Greek Financial Challenges
2015 will be one of the most jarring of the European Union in recent decades, and the basis of much of the problems standing our southern neighbor Greece. Year Greeks began with euphoria past election victory of the Coalition of the Radical Left (SYRIZA), which promised an end to the severe economic measures leading to ever more desperate poverty in the country.
Government of Alexis Tsipras began his term with the approval of more than 80% of Greek citizens but will finish the year with over 80 percent disapproval of the policy.
And between these two polls stay several months of skirmishes with creditors surprising, but largely without much sense referendum bank holiday, a new third rescue program and early parliamentary elections – the fourth in the past three years, and in the past months and refugee crisis covering the country …
Ever since coming to power the government of Syriza started painful talks with three institutions granted loans to the country – the International Monetary Fund, European Central Bank (ECB) and the EU, using as weapons the threat of leaving the eurozone.
But just turned against them, because it turned out that the markets had already rehearsed this scenario, the estimated risk of disintegration of the whole monetary union and is now waiting for the next steps of the far-left party. So Greece proved just steps from Grexit (exit from the euro area) and did even as a temporary measure, proposed by German Finance Minister Wolfgang Schaeuble.
Months after critical negotiations Greece’s exit from the eurozone is still discussion on Europe. Czech President Miloš Zeman said at the end of the year that his country will be part of the currency union if possible on the first day that Greece leave him.
In early July, despite strong mandate from the Greek people voted with “όχι” (“no”) a referendum on proposals to creditors, Alexis Tsipras had to agree with the three institutions to adopt a new rescue program, absolutely contrary to promises and led to the current policy of the government.
He managed to avoid some degrading conditions, such as the creation of a new privatization fund managed by Luxembourg rather than Athens.
Among the demands of creditors, however, is missing avoidance of all governments so far pension reform, including the abolition of early retirement and a new reduction of pensions and reducing tax breaks for farmers and speeding up the process of privatization of assets.