International funders have put off deciding on a Greek aid package until sometime next week. This came after the leaders of Greece's political parties finally agreed in writing yesterday to implement a new austerity package passed by parliament. The pledge was demanded by understandably skittish EU funders before they would even discuss the next bailout payment. It is anyone's guess if either the pledge or the payment can do any good for a nation that is near a total economic and political meltdown.
Although Greek conservative leader Antonis Samaras has sent a letter to the European Union and IMF committing himself to the austerity package, that commitment still seems very conditional. In the letter Samaras wrote, "If Nea Demokratia (New Democracy) wins the next election in Greece, we will remain committed to the Program's objectives, targets and key policies." However, he also stated that "policy modifications might be required to guarantee the full programme's implementation."
Greek citizens - facing an unemployment rate of more than 20 percent and an economy that shrunk by 7 percent last year - have repeatedly rioted over the proposed austerity plan. Among other things the plan cuts the Greek minimum wage from $992 a month to $774 a month; for those under 25 it goes to $675 a month. It also cuts the government workforce and slashes pensions and salaries. With elections expected in April it is difficult to believe that anyone can be elected who says they will go along with the plan.
This - and Athens' track record of broken promises - is exactly what has German officials so concerned. Because Germany will be footing much of the bill, their opinion is essential if any bailout is going to go ahead. Last month Chancellor Angela Merkel proposed putting a German in charge of Greece's economy. This idea is seen as insulting and is hated by Greeks who still remember Germany's occupation of their nation during World War II.
Greek leaders, under pressure at heavy pressure at home, are beginning to balk at what they see as an unending set of demands from the EU, IMF and European Central Bank. Finance Minister Evangelos Venizelos told reporters today, "We are continually faced with new terms. In the euro area, there are plenty who don't want us anymore. There are some playing with fire, domestically and abroad. Some are playing with torches and some are playing with matches. But the risk is equally great."