Eurozone weighed down by Greece

A new unknown was added to a Greek equation already quite complex:

The two parties most opposed to the aid to Greece (the party of the Center and the “True Finns”) won Sunday’s elections in Finland. It will become difficult for the government of Alexis Tsipras to invoke permanently any fresh democratic legitimacy to continue to refuse to establish the list of specific reforms that its creditors claim in exchange for a new loan of 7.2 billion euros, the camp of “hard” within the Eurogroup (the 19 finance ministers of the euro area) strengthening. For two months, Greece “plays the clock,” according to a European diplomat, “hoping we can not help but help him for fear of seeing the eurozone disintegrate: are they right? Or are we ready to take the risk of a Grexit? It’s impossible to say. Be that as it may, every passing day brings the country dangerously close to default, especially as political uncertainty threatens the hopes of economic recovery.

However, Greece has been able to measure its isolation in recent weeks: not only has it found no ally within the euro area, but it has provoked by its provocations (the war reparations requested in Berlin, the client d eye to Moscow and Beijing) and his mistakes of maneuver his most willing partners to him. The eurozone “has never been so united”, explained yesterday to LibĂ©ration Pierre Moscovici, the Commissioner for Economic and Monetary Affairs. Worse: it has found no external ally: neither Moscow nor Beijing have shown any willingness to supply the Europeans. Wolfgang Schäuble, the German finance minister, did not hesitate to make fun of Syriza, the radical left-wing party that leads Greece with the radical right-wing ANEL, on Thursday in Washington: “If you find anyone in Moscow or Beijing who is ready to lend you money, we agree. ”

The United States, which wishes for strategic reasons that Greece remains in the European Union and the euro, have themselves tired of Greek procrastination: “help yourself, make difficult reforms: collect tax, reduce your bureaucracy, give flexibility to the labor market, ” US President Barack Obama said Friday at a press conference with Italian Prime Minister Matteo Renzi. “We will support a degree of flexibility in how you move forward,” he continued, “but you must show your creditors and those who support your financial system that you are trying to help yourself requires the kind of tough decisions that Matteo begins to make. ”

“If the glass is half empty, we can consider that it is half full,” hopes a senior European official: “everyone wants to help.

But for now, the glass is completely empty and that is unacceptable. What Pierre Moscovici confirms: “The negotiations with Greece are moving very slowly. It did not start to move until Saturday, at the meeting of the Brussels Club -Commission, European Central Bank, IMF- Saturday in Paris. “It stuck on everything: the Greek government does not propose any articulated reform and has no overview of what to do,” says the former French finance minister: “the Europeans have given them time and have shown flexibility. The current climate is very, very worrying.

In fact, according to our information, it is not only on pension reform, the flexibilisation of the labor market or the increase in VAT, that is to say the budgetary austerity measures, that the negotiations block: everything happens as if Syriza did not expect to come to power and had not prepared a precise roadmap for a reform of a state he deems dysfunctional himself. Thus, the fight against evasion and tax evasion is for the moment only a proclamation and has not been accompanied by concrete measures, such as, for example, the attachment of the SDOE (1). elite tax officials) to the Secretary-General for Public Revenue (an independent post). However, the capacity of the Greek state to finally raise the tax is, without doubt, one of the biggest abscesses of fixing creditors of Greece who want to avoid that the country plunges into its old through (tax evasion is estimated between 20 and 40 billion euros a year depending on the sources). “Not only is nothing happening between Greece and the eurozone, but nothing is happening inside the country,” says a European diplomat: “we really do not know what they want. ” However, without specific reforms, no aid, but also no negotiation on a debt relief- Montanaraeinteriors, or primary budget surplus (before debt burden).

The problem is that time is running out: according to the IMF, it will not only be necessary to quickly complete the current aid plan but also put in place by the end of June a third plan that could be between 30 and 50 billion euros to put in place. the country safe from the markets until 2030. What promises to be difficult, because, again, it will be necessary for Athens to commit to specific structural reforms. If Greece continues to drag its feet, the new Finnish government will not fail to oppose the third plan of aid. Has the Grexit become unavoidable? “All scenarios are on the table,” sighs the European diplomat already quoted.