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Is this the final act in the Greek drama?

International lenders are wary of contributing any more to bailing out the Greeks. So are Greece's rescuers giving up on the country, and getting ready to let it go off on its own?

In Greece, it's time for the troika again. Auditors from the International Monetary Fund (IMF), European Central Bank (ECB) and the European Commission have descended on Athens and are scheduled to begin work this week. By mid-September, the experts plan to determine whether Greece has implemented promised austerity measures. Just as in March, when the big issue was a partial cancellation of debts owed to private creditors, the auditors' visit will be accompanied by a cacophonous choir of comments from all those involved.

The Greek government may be evoking the threat of imminent state bankruptcy, but the creditor states are weaving their own fantasies of a Greek exit from the eurozone and an end to bailout payments. Extreme positions were held, too, in May and June, ahead of Greek parliamentary elections - in the end, there was a compromise.

Decision in September

The new act in the Greek drama is likely to run through mid-September - but it's certainly not likely to end before Germany's Constitutional Court decides on the permanent European Stability Mechanism (ESM) rescue fund on September 12. Two days later, EU finance ministers gather in Cyprus, which itself became the fifth eurozone country to ask for a bail-out just days before it took over the European Union's six-month rotating presidency on July 1.

Philipp Rösler

Germany's Philipp Rösler has almost written Greece off

Initially, the Greek government was to decide on additional austerity packages in June in turn for a fresh 31-billion euro ($37.4 billion) loan in July. Athens is unlikely to get that next tranche, however, as the new Greek government has failed to submit details of all the spending cuts it has agreed to. Meanwhile, state bankruptcy is hardly impending as there appears to be sufficient money to cover wages and state expenses through mid-September and the ECB has deferred the repayment of mature government bonds. In March, then-Finance Minister Evangelos Venizelos threatened his country's impending bankruptcy - which did not occur, even though the payment of aid funds was delayed for weeks.

'More than skeptical'

Meanwhile, the German economics minister, Philipp Rösler, has been increasing the pressure on Greece by talking about the possibility of a voluntary Greek withdrawal from the eurozone. He told German public television ARD that he was very skeptical about Greece remaining in the zone.

"Let me say this quite clearly," he insisted. "If Greece doesn't fulfill its conditions, then there can be no further payments to Greece." Similar threats have come from Finance Minister Wolfgang Schäuble and Chancellor Angela Merkel - but Merkel has never spoken about Greek withdrawal.

The IMF is pushing the same line with its alleged intention of no longer contributing to any additional Greek rescue funds. The new Greek prime minister, Antonis Samaras, originally wanted to extend the period of reform by two years - and that would mean a third rescue package of between 10 and 50 billion euros. Nobody in the EU or in the IMF wants to promise that right now.

The issue was discussed in Brussels at the EU finance ministers' meeting in March, but diplomats say that the Germans insisted on removing any reference to the discussion from the minutes.

'The Greeks are trying hard'

Yiannis Stournaras in parliament

Stournaras has to try to balance the wishes of his people and the banks

The German insistence that Greek will get no money unless it fulfills all its commitments means that there isn't much room for maneuver in this act of the Greek fiscal drama. Jorgo Chatzimarkakis, a German MEP of Greek origin, has described the pressure the German economics minister - a member of his own party, the pro-business FDP - is putting on Greece as irresponsible.

"The Greek political world is trying right now to implement speedily the measures which unfortunately were not possible during the election campaign," he told DW. "It's a slap in the face for the new finance minister, Yannis Stournaras, who's doing all he can to put things in order."

Subsidizing 'a hopeless case?'

The troika has already submitted a list of 210 tasks which the Greek government has so far failed to carry out. At the current rate of reform, it seems well nigh impossible that the whole list will have been ticked off by September.

The financial expert Philipp Vorndran says the rescue concept has already failed. He warned two years ago that Greece was broke.

"Greece hasn't got a business model with which it can survive inside the eurozone," he told DW. "Nothing has changed in that respect. For us, it's clear that, sooner or later, Greece will have to leave the eurozone."

The only alternative, which it would not be possible to sell to German voters, would be: "We, the strong economies, like Finland, Germany, Holland and Austria, stand up and say: We will carry on subsidizing this hopeless case in the long term."

One financial measure recently taken by the ECB can be taken as a possible hint that the Greek drama will reach its climax this summer: the bank has said it will take no more Greek bonds as collateral for loans - in other words, it's not prepared to have these "junk" bonds on its books. It already holds Greek bonds worth between 15 and 20 billion euros, which would be immediately worth nothing if Greece left the eurozone and introduced a new currency. The ECB would have to carry the huge losses. It would be the ECB shareholders who would carry ultimate financial responsibility - the shareholders are the states in the eurozone, and so, in the end, it would all come back to the taxpayer.

Author: Bernd Riegert / mll
Editor: Andreas Illmer

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