After months of tense negotiation, sensational reports, scathing denials, shuttered banks and capital controls, it looks like Greece is finally about to sign on the dotted line and approve its bailout deal.
Today the country’s parliamentarians vote on whether to approve the bailout deal that was finalised by finance minister Euclid Tsakalotos and the country’s European creditors earlier this week.
Greece agreed to a series of painful and largely unwanted structural reforms, like phasing out early retirement and privatising Greek state assets like it’s going out of fashion.
The fiscal plans they have had to sign up to look slightly less austere than they previously did — they’re being asked to run a primary surplus (a budget surplus before accounting for debt interest) of just 0.5% of GDP next year, as opposed to the 2% they were being asked to previously — but that largely reflects the massive damage done to the Greek economy by the recent months of bank closures and capital controls.
Prime Minister Alexis Tsipras in likely to find agreement on the bailout in parliament, though many of those voting in favour of it will be his opposition. Most of those voting against will be from Syriza, his own party.
One of those will likely be former finance minister Yanis Varoufakis, who says that the deal “won’t work.”
The Eurogroup of eurozone finance ministers have scheduled a meeting on Friday to sign the deal off on their end. Though that seems more likely than not to go ahead, Finland’s government has expressed reservations, and the country’s deeply eurosceptic foreign minister says the bailout may not get Finnish cooperation.
The International Monetary Fund has already bowed out of the bailout at this point, calling it unsustainable due to the lack of debt relief attached to the programme.
That may cause some angst, particularly among German lawmakers, but most analysts seem to think that the deal isn’t going to be derailed, given that it’s come this far already.
Of course, this won’t be the end of Greece’s challenges with bailouts. Getting debt relief from its European creditors requires that the country passes reviews assessing its implementation of the deal. Since parts of it (for example the privatisation programme) have absurdly optimistic goals, that’s going to be extremely difficult.
The current government is ideologically opposed to the sort of policies it’s now having to endorse, and it’s hard to imagine that there won’t be huge stumbling blocks down the road. Syriza’s left platform has been unsurprisingly unimpressed with the recent direction of the leadership, and Greek consultancy Macropolis has even argued that a full split and snap elections could be possible.
So event if things from Athens seem a little quieter for a while, it will probably be back in international headlines before you know it.