Greece may find it difficult to stick to the terms of a hard fought bailout deal. Fresh opinion polls indicate that Tsipras’ left leaning Syriza party is running neck-to-neck with the conservative New Democracy party just two weeks ahead of fresh elections.
In such a scenario, Tsipras has promised to work for more favorable terms from Greece’s creditors. This runs counter to his promise to stick to the terms of a deal which brought the country back from the brink of a disastrous default.
Hard Fought Bailout Deal
After much heartburn for investors, Greece reached an agreement with its lenders on a bailout deal during the middle of July. Among other terms of the agreement, Greece needs to broaden its tax structure and improve long-term sustainability of pension schemes.
Greek government’s vote in favor of austerity measures alleviated concerns about the country’s exit from the currency bloc. Approval for tougher policy overhauls and pension reforms came in despite violent protests by anti-austerity demonstrators ahead of the Greek parliamentary vote.
Eurozone finance ministers agreed “to grant in principle a 3-year ESM stability support to Greece.” Additionally, the ECB President Mario Draghi said the central bank will give more aid to Greece…Read more