After months of political drama and cropping out doomsday scenarios, Greece has been finally granted the much request $96 billion bailout which will see it remain in the Eurozone, at least for the time being.
Finance minister from Eurozone countries have approved the lifeline at a meeting in Brussels on Saturday, putting an end to nearly six months of intense negotiations which, at one point, seemed impossible to resolve. Greece ended accepting nearly all of its creditor’s initial demands, despite the fact that a popular vote called by Prime Minister Alexis Tsipras initially resulted in the Greek population rejecting the terms in an overwhelming majority.
However, the situation in Greece remains hazy even with the bailout approved. The negotiations have taken their toll on the country’s left-wing leading party Syriza, which is now facing internal turmoil as euroskeptic lawmakers are openly against the deal and Tsipras. This might mean trouble implementing the agreed austerity measures, including a widely criticized VAT increase, as a Parliament vote on the deal Friday resulted in mass defections from the party – possibly forcing Tsipras to call for new elections in September.
Syriza’s anti-bailout group has nearly stopped the leading party from adopting bailout resolutions, which were mostly done with help from opposition politicians. However, Tsipras has no real government majority backing them – as even these parties have ruled out a long-term collaboration with Syriza. About a third of Syriza’s members in the Greek Parliament have spoken or voted openly against deals and austerity measures in the past month, as Tsipras struggled to balance his party’s program with creditor demands.
Even though the deal saves Greece from exiting the Eurozone and defaulting on its massive debt, the austerity measures will probably prove wildly unpopular with the Greek population as it will put even more strain on the country’s battered economy and its population. The Greek crisis has already entered its sixth year, and mass demonstrations from a population worn out of years under the poverty line are to be expected.
This also questions whether, in the event of elections, a new version of Syriza without bailout skeptics would even manage to win the public over. Most of Syriza’s platform which brought them a Parliamentary majority in January’s elections was based on a firmer position in bailout negotiations and a rebuffing of excessive creditor demands – which Tsipras and his entourage were forced to go over as to avoid the country defaulting on its debts.
strong>Image Source: NY Post