On Monday, June 22 a Euro Summit will discuss developments at the highest political level. But the ultimate deadline seems to be the end of June, when Athens faces substantial payments to the IMF. Greece is likely to leave the eurozone and possibly the EU if it fails to reach an agreement to unlock a €7.2 billion bailout installment, said a statement from the Bank of Greece a couple of days ago.
While the first indications of a recovery were evident by the end of 2014, the instability associated with an early election against the background of a still fragile economy and an apparent lack of consensus on the way forward brought to the fore a series of doomsday scenarios and negative projections. The new government appeared to be making substantial concessions in its early negotiation with creditors in late February, opening the door to an extension of the bailout program and further talks on the future of reform efforts. In view of the eurozone’s evolving architecture and the German government’s insistence on a certain version of Ordoliberalismus, it was a sensible thing to do.
But SYRIZA the party reasserted itself, imposing on the SYRIZA-led government a different set of options. And talks dragged on and on. In an economy marked by rigidities, a sudden increase in liberalization may mobilize a coalition of interested groups: successive Greek governments have attempted to avoid such change and, since the first rescue packages in the eurozone were introduced in 2010, all players involved – EU, ECB, IMF and domestic authorities– have eschewed large-scale structural reform opting instead for austerity packages that placed too much emphasis on fiscal devaluation in the context of the monetary union.
On Monday, June 22 a Euro Summit will discuss developments at the highest political level. But the ultimate deadline seems to be the end of June, when Athens faces substantial payments to the IMF. Greece is likely to leave the eurozone and possibly the EU if it fails to reach an agreement to unlock a €7.2 billion bailout installment, said a statement from the Bank of Greece a couple of days ago.
International investment, including energy deals, would be among the key parameters for development. Peace and stability in Southeastern Europe require advanced multilateralism; but they also require predictability and cooperation based on long-term calculations. In this context, it will be in the best interests of all parties involved if Athens could reach a pragmatic agreement with its partners and remain a stable, open, and pluralistic member of both the eurozone and the EU. Unless it succeeds on that front, Greece will be unable to pull its weight on any front.
