Greece is to get a new €2.5bn in loans this month plus a further €500m in October, a meeting of eurozone finance ministers decided. In addition, the European Central Bank is to return €2bn in profits earned from Greek bonds while the International Monetary Fund is expected to supply €1.8bn in August.It's important to note here that the assistance is in the form of new loans. It has the advantage of allowing Greece to roll over maturing debt. But the new debt along with the brutal austerity measures shrinking its economy year after year, it will on make the debt as a percentage of GDP worse.
German Chancellor Angela Merkel, who is really the main one calling the shots on this, had hoped to avoid any new outbursts of the euro crisis before German parliamentary elections in September. But not only is Greece not meeting its targets (for economic self-destruction), Cyprus is worried about additional funds it now calculates it needs to recapitalize its banks and Portugal's latest government that was just formed is struggling to decide how fast to obey Angie's orders for them to destroy their economy with austerity measures, too. (Giorgos Christides und Carsten Volkery, Treffen der Euro-Gruppe: Griechen-Rettung auf Raten Spiegel Online 08.07.2013)
|Angela Merkel helps Greece some more|
As Traynor reports, Angie wanted to make especially sure the suffering continues in Greece:
Talks over the weekend between the Greek government and the troika of officials from the European commission, the European Central Bank and the International Monetary Fund resulted in a last-minute agreement on a new package of spending cuts, job losses and fiscal reforms in Greece in return for the bailout funds.Prolonged depression conditions with nothing in prospect but more austerity policies is helping the far-right Golden Dawn party in Greece. (Athens mayor makes complaint over Golden Dawn MP's 'attempted assault' AP/Guardian 05/08/2013)
But Germany wanted to increase the pressure on Athens, hold it to benchmarks on the implementation of reforms and calibrate the release of bailout money to tangible results.
While Pierre Moscovici, the French finance minister, went into the meeting expressing his confidence that new loans would be disbursed, his German counterpart, Wolfgang Schäuble, made no mention of money, emphasising that first the ministers would need to study the fine print of the latest troika-Greek government deal.
Schäuble said: "It will remain difficult for Greece." He added that the latest report on Greece from the troika would be "very precisely assessed." [my emphasis]
Who would have thought an economic depression might do that? Other than, say, anyone who knows anything about European politics during the Great Depression?
But Angela Merkel-Brüning insists the screws have to be tightened!
Tags: angela merkel, austerity economics, eu, euro, european union, greece