Honestly, why is there such a rush to gain access to the world financial markets? Why this should take place in the middle of the summer and not in autumn when the economy will have had the time to present an even better outlook by incorporating fiscal results and records coming out of the tourism industry?
Why does the government need an immediate and successful entry into the markets?
We all recall the initial planning of the government which, at an early stage included:
A) The sustainability and viability report on the Greek debt by the IMF
B) The country’s entry in the Quantitative Easing (QE) program. The aim was crystal clear, for the country to be able to gain access to the markets so as to release itself from the MOU vortex.
Question: Since the country did not receive the favorable sustainability and viability report on the Greek debt that it wished for and it does not seem that it will receive the much needed and wanted, why is there such a rush to gain access to the markets at this given point in time?
Stress and agony over a success story
Why does the SYRIZA-ANEL government needs and pushes really hard to have its own success story at this given point in time, even though it furiously attacked the equivalent success story of 2014 of the Samaras-Venizelos government.
What if the Governor of the Bank of Greece, Yiannis Stournaras, is trying to warn the government, via Wall Street Journal that “it is too early for the country to return to the markets”, the government has a grave need to produce a positive success story.
It is somewhat logical, if we take into account the fact that with the completion of the second assessment and the vote on the additional, hard fiscal measures relating to pensions, wages and the tax exemption issue along with the debacle that the government faced in the debt management issue and the fact that it will be dealt with at a later date….and when all this is coupled with the government’s overall demise in the polls –what else is there for the government and the Prime Minister’s Office?
Just a mere spark that will change the overall image of the government, if not for good, just even a mere instant photo shoot opportunity.
Still, the government has a great ally on its side on its first attempt to enter back into the world fiscal markets. The European Commission itself. Its vice president, Valdis Dombrovskis stated to Greek media outlets that “the next issue will be the country’s preparations for a successful exit to the fiscal markets, so that it can stand at its own two feet and release itself from the hold of the current programs. We need two things: the first has already been done and has taken place, the lifting of the measures taken under the excessive deficit procedures and the other is for the country to remain committed to the reform process and their implementation and to secure levels of continuous development”.
It is rather obvious that two years after the extremely tough fiscal measures package of 14.5 billion euros to Greece, after the 3rd MOU and the additional loan of 86 billion euros, there is an absolute need for a positive message and a success story, and this need is also shared by the EU Commission which has given out the loan to Greece …
As for the rush for this to take place within July, let us keep in mind, two facts.
A) Initially everyone knows and understands that within then next few days the IMF report on the sustainability of the Greek debt will be published, which will in effect deem it to be extremely unserviceable, and thus they have to have the success story before hand otherwise once the extremely negative report is published the global investors will be even more unwilling to invest into the Greek economy
B) In October, the country is entering the stage of the 3rd fiscal assessment and the country’s citizens will come face to face with a particularly new & harsh tax collection system that will come into effect.