Eurogroup statement following Thursday’s session

euobserver.com

“The institutions briefed the Eurogroup on the second review of the economic adjustment programme, following their review mission to Athens in December.

The Eurogroup urged the Greek authorities and the institutions to swiftly resume negotiations to agree on a policy reform package shared by all stakeholders. Such an agreement is a condition for the successful conclusion of the second review.

The reforms concern Greece’s labour and product markets, its energy sector and other areas. An agreement on Greece’s medium-term fiscal strategy, i.e. in 2018 and beyond, is also expected”.

This will mean that the Greek government will have to legislate now for an additional austerity package of over 4 billion euro over the next two financial years and in addition accept primary surplus targets of 3.5 % in the ‘medium term’ – the ‘medium term’ being a period of 4 to 10 years beyond 2018.

“The European Stability Mechanism (ESM), which is providing the financing for the programme, informed ministers about progress made in implementing the short-term debt relief measures for Greece. These measures were endorsed by the Eurogroup in December and formally adopted by the ESM and EFSF (European Financial Stability Facility) boards of directors on 23 January 2017.

The measures aim to reduce interest rate risk for Greece, including by changing some debt rates from floating to fixed, and to make the burden of debt repayment easier. They do not have any budgetary implications for the ESM shareholders, which are the euro area member states”

Again these measures are estimated to reduce Greek debt by 20% in 2060. But the IMF estimates that without either restructuring or additional measures and a lowering of the targets, the Greek debt will increase to 275 % of GDP (from 175 % today).

So it looks like additional measures, cut in pay and more taxes are to be expected in the near future that will kill the ‘green shoots of recovery’ and will bring more unemployment and poverty to the country.

And just to get the long term economic predictions into perspective: All-electric vehicles are going to dominate the car industry by 2030 and conventionally extracted oil reserves are going to run out by 2050.

Greece is expected to get some debt reduction by 2060.

It would seem then,  that only certainty in the future of the world’s economy for  2060 and beyond, is that Greek people will be still squeezed to repay an unpayable debt for generations to come.