Euro crisis: You have six days to comply…

That’s the message to Greece from Germany the EU finance ministers.  Despite initial reports, prompted by the Greeks themselves, what was agreed yesterday between the party leaders there fell short of what was required – by some €300-odd million.  From the Irish Times report

The ministers imposed a six-day deadline on Greek authorities to comply with their wishes and said all three parties in its coalition must pledge to implement the austerity plan and continue to do so after a general election expected in April.

The ultimatum from the ministers, who will meet again next Wednesday to sign off on the €130 billion rescue, came at the end of a day in which Greece’s technocrat prime minister Lucas Papademos finally secured his government’s support for the new reform package.

The escalation of pressure on Greece reflects frustration in Europe at the failure of its leaders to execute policies promised in its unsuccessful first bailout. Ministers had signalled as they arrived in Brussels that they would not be endorsing the new bailout straight away.

The ministers will insist that no new loans are released without evidence that Athens is executing the plan in full.

“No disbursement before implementation. We cannot live with a system where promises are made and repeated and repeated and the implementation measures are from time to time too weak,” said Luxem-bourg’s premier Jean-Claude Juncker, chief of the group of ministers.

[That Jean-Claude Juncker? – Ed]  Indeed.  Whether the Greek parties pay any more attention to this ‘deadline’ than they did previous ones is another matter…

In Athens, tempers continue to fray.  And the leader of the minority partner in the coalition, George Karatzaferis, has dropped a “bombshell”

George Karatzaferis has declared that he cannot vote in favour of the austerity measures that international lenders insist Greece must accept.

Karatzaferis explained that he believes the road being proposed by the troika is ‘not right’.

He also explained that he still supports Lucas’s Papademos interim government, but wants the Greek prime minister to consider a reshuffle.

Karatzaferis’s Laos party controls 16 seats in 300 seat parliament, so Papademos would still have a majority if Laos walked out of the coalition (which does not appear to have happened).

However, his power extends beyond simple parliamentary maths, as the EU has demanded that all parties need to sign the bill before financial aid is released.

The BBC Europe editor, Gavin Hewitt calls it the “most dangerous moment”.

The size of the crowds on the streets will be important. Already some politicians are wavering over whether to support the new measures. The country’s deputy labour minister has resigned.

If any of the three conditions are not met by next Wednesday then Greece is heading for default.

Finance Minister Evangelos Venizelos accepts the country is being humiliated. He said to the Greek people: “The choice we face is one of sacrifice or even greater sacrifice – on a scale that cannot be compared.”

Nothing underlines the humiliation more than the suggestion from France and Germany that Greece set up a separate account dedicated to repaying its debts.

Many will argue that if that happens what is left of Greek sovereignty will have been cast aside.

It is not difficult to have conversations in Greece where people say they never imagined that joining the EU would result in outsiders dictating policies to them.

Mr Venizelos frames the debate as a choice between staying in the euro or leaving. He challenges the conservative leader, Antonis Samaras, to make the choice.

The finance minister says that if you want to stay in the eurozone, then you have to agree to cuts in pensions as demanded by the EU and the IMF.

He, Gavin Hewitt that is, thinks the ‘deadline’ will be met.

The most likely outcome is that Greece will meet the three conditions by next Wednesday not because they believe in the plan but because they fear the chaos of the alternative, default.

Others, however, are not so sure.  [Adds – And not just in the Telegraph.]

[And “the political trilemma”? – Ed]  Ask Frau Bundeskanzlerin.  Or hope that it crops up in the Guardian’s live-blogging updates.

ANYhoo… “These questions—and many others—will be answered in the next episode…

Adds  From a new Irish Times report

Greek prime minister Lucas Papademos told his turbulent coalition government tonight to accept a harsh international bailout deal or condemn the nation to catastrophe.

“We cannot allow Greece to go bankrupt,” he told a cabinet meeting. “Our priority is to do whatever it takes to approve the new economic programme and proceed with the new loan agreement.”

Mr Papademos, the sole technocrat in a coalition of feuding politicians, tried to assert his authority after six cabinet members resigned over EU and IMF demands for yet more pay, pension and job cuts in return for the financial rescue.

“It goes without saying that whoever disagrees and does not vote for the new programme cannot remain in the government,” he said in televised remarks.

Greece faces bankruptcy unless it gets the funds from the IMF and European Union by March 20th when it has to repay €14.5 billion in maturing bonds.

A former central banker, Mr Papademos tried to raise Greeks’ spirits as the nation enters its fifth year of recession, saying economic growth would return in 2013 despite accusations that the austerity is merely driving Greece into a downward spiral.

Any alternative to the rescue would be much worse, he said in opening remarks using the word “catastrophe” four times.

Well, it is serious…

Discover more from Slugger O'Toole

Subscribe to get the latest posts to your email.

We are reader supported. Donate to keep Slugger lit!

For over 20 years, Slugger has been an independent place for debate and new ideas. We have published over 40,000 posts and over one and a half million comments on the site. Each month we have over 70,000 readers. All this we have accomplished with only volunteers we have never had any paid staff.

Slugger does not receive any funding, and we respect our readers, so we will never run intrusive ads or sponsored posts. Instead, we are reader-supported. Help us keep Slugger independent by becoming a friend of Slugger. While we run a tight ship and no one gets paid to write, we need money to help us cover our costs.

If you like what we do, we are asking you to consider giving a monthly donation of any amount, or you can give a one-off donation. Any amount is appreciated.