More difficult days ahead
Eurozone leaders welcomed new budget proposals from Athens last week as a basis for further negotiations to achieve a deal with the Greek Government.
In the last few days, officials of the three institutions representing Athens’ creditors – the European Commission, the European Central Bank and the Inter-national Monetary Fund – were analysing the Greek proposals in Brussels to see whether the cuts are enough to meet their demands which aim to minimise wages, social welfare and public services. The creditors may well come back and demand further cuts and reform measures.
Parliamentarians, even from Tsipra's SYRIZA party, voiced outrage at the Prime Minister's offer to raise a range of taxes as well as cut pension and healthcare contributions, which threaten to further increase hardship on Greeks reeling from previous rounds of austerity.
Tsipras, who fears the parliament won't back his deal, has called a national referendum for the people to decide on 5 July 2015.
It is obvious however that the outcome of such a referendum will be determined by the threats of bank closures and a national bankruptcy.
Even if Tsipras is forced to call a new election, it will probably result in the re-election of SYRIZA with an increased majority due to the shrinkage of the PASOK (centre left) and New Democracy (centre right) parties. Tsipras would also have the leeway to replace any of his vocal opponents within his own party.
Financial improprieties by corrupt politicians and the banking sector, as well as the neo-liberal policies of the EU and the IMF, led Greece (and other European countries) to deep indebtedness. Athens is now pressured to find 1.6 euro for loan repayment due to the IMF next Tuesday.