A silver lining in this year’s Greek bailout drama is that Prime Minister Alexis Tsipras has, at least, ceased to pretend to try to be negotiating a good deal. Gone are the theatrical displays of trying to wring concessions from the Troika. Instead, Tsipras is falling over backwards to push extra cuts through parliament.
The parliament has barely approved measures to slash its budget by €5.4 billion, and already Tsipras is preparing legislation for more VAT and taxesto be passed before the next euro-area finance ministers’ meeting on May 24 to obtain more tax payer money or bailout funds for the banks.
The Greek economy, already, reduced to 75% of its precrisis size, is set to shrink yet more. It contracted again this quarter.
As Greece plunges deeper into a debt death spiral, Tsipras is trying to sell the possibility of debt relief after 2018 as a huge victory. Debt relief but no haircut was put on the table by Germany’s Finance Minister Wolfgang Schaeuble, in return for an impossible and recessionary goal for Greece of running a 3.5% budget surplus.