Greece’s next bite of bailout money may turn into a movable feast if Prime Minister Alexis Tsipras can’t convince eurozone authorities he’s making good on his promises.
“Everyone got used to the fact the reviews take longer,” Lithuanian Finance Minister Rimantas Sadzius said in an interview on Friday. “Everyone’s prepared to demand that agreements are implemented at 100%,” Bloomberg reported.
European governments won’t rush through additional disbursements until Tsipras delivers on pledges to fix Greece’s pension system, update its labor markets and close fiscal gaps. A slow approach to resolving the nation’s financial needs has already pushed borrowing costs to levels not seen since last August and runs the risk of renewing last year’s conflict that nearly ended Greece’s membership in the eurozone.
Greece may get €4 billion ($4.34 billion) or more once the nation’s creditors complete a review of the most recent bailout, according to a eurozone official who asked not to be named because talks are ongoing. If Greece fails to unlock more funding it may face a cash crunch by the middle of the year.
Economic Overhauls
The first evaluation of Greece’s €86 billion aid program that was inked in August, which was supposed to conclude in February or early March, is now sitting in limbo. In an interview published Monday, ESM chief Klaus Regling told Le Figaro he thought the assessment could be “concluded before Easter”–without specifying whether he meant this year’s March 27 celebration in Rome or the Greek Orthodox Church’s May 1 observance.
Greek government notes are the worst performing of all sovereign securities tracked by Bloomberg’s World Bond Indexes this year, amid doubts over the government’s ability to push through painful economic overhauls demanded by creditors. Greek stocks have dropped more than 15%, amid a succession of protests by farmers, doctors, lawyers, pharmacists and other independent professionals against the government’s pension reform proposals.
Thousands of tractors have been blocking Greece’s motorways, bringing traffic to a halt, while the government said Monday that it will amend some of its proposed hikes to mandatory pension contributions, in an effort to stem social backlash. Officials representing creditor institutions have been assessing whether the debt-ridden country will deliver additional pension savings equal to 1% of its gross domestic product this year and achieve a primary budget surplus equal to 3.5% of its GDP by 2018.
