Why is Alexis Tsipras signing up to worse austerity measures for Greece?

As said before, Greece isn’t going anywhere — and apparently Greece would rather capitulate and be placed under German and Troika command than bow out and face imminent total collapse within days or weeks. It would lead to a violent overthrow of the Tsipras government whereas Alexis would likely still be soon replaced for defying the Greek “No” referendum vote, or, the will of the people. Capitulation will still lead to a draining of the Greek taxpayer bank accounts as per bailout requirements.

 

Why have the Greeks signed up to harsher austerity?

Prime Minister Alexis Tsipras is banking on securing an agreement with his creditors to keep the country in the euro. By agreeing to carry out many of the tough reforms and spending cuts he has so far resisted, he hopes to get a big concession on relieving part of the country’s debt.

Is this worse than the deal voters rejected in the referendum?

Yes and no. On the one hand the VAT hikes and pensions reforms are exactly what creditors have wanted over the last month.

However, Greece’s lenders seem to have finally come round to the idea of alleviating the country’s debt burden, after severe pressure from Washington. This was something that was always promised to Greece when they signed a bail-out in 2012, but it was never put in formal writing.

Athens is also asking for a much bigger rescue package than it was before. This is around €75bn over the next three years so deeper reform measures are the price they’ll have to pay.

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What does debt relief look like?

The Greeks want to have the repayments on their loans extended far into the middle of the century. Right now, the country will still be paying back their lenders in 2057. They also want to reduce the interest payments on the €330bn debt pile.

Why is it such a problem?

The eurozone’s creditors, including its biggest bail-out contributor Germany, don’t want their taxpayers to take a hit from further debt easing on Greece’s debt. In particular, poorer members of the bloc, such as Estonia, Slovakia, and Latvia, feel they shouldn’t have to suffer losses to keep Greece in the eurozone.

Full article: Why is Alexis Tsipras signing up to worse austerity measures for Greece? (The Telegraph)