By Guillermo Medina
MADRID, Mar 4 2015 (IPS)

At last, on Tuesday Feb. 24, the Eurogroup (of eurozone finance ministers) approved the Greek government’s commitment to a programme of reforms in return for extending the country’s bailout deal.

The agreement marks the end of tense and protracted negotiations. It consists of a four-month extension for the second bailout programme worth 130 billion euros (over 145 billion dollars), in force since 2012 and which was due to expire on Feb. 28. The first bailout was for 110 billion euros, equivalent to 123 billion dollars.

Guillermo Medina

During this period, the European Central Bank (ECB) will provide Greece with liquidity and the terms of a new bailout will be hammered out.

The eleventh-hour agreement was no doubt motivated partly by fears that a “Grexit” – Greek withdrawal from the eurozone monetary union – would have triggered a financial earthquake with unforeseeable consequences. The result is a very European-style compromise that averts catastrophe and gains time while avoiding facing the underlying problems.

In exchange for an extension of financial support from Greece’s partners and creditors, Prime Minister Alexis Tsipras will have to submit all his government’s measures during this period to Eurogroup inspection.

But the deal promises Greece more than just restrictions. The country will have to pay its debts to the last euro, but if, as seems probable, deadlines for primary surplus targets are extended, the country will have greater ability to pay (France has just secured this for itself).

In the final document, Greece promised to adopt a tax reform that would make the system fairer and more progressive, as well as reinforce the fight against corruption and tax evasion and reduce administrative spending.“Germany has undeniably secured its basic goal: the enshrining of austerity as the fundamental dogma of the new European economic order, although political prudence and even self-interest have softened the application of the dogma, and may continue to do so in future”

If the government pursues these goals, together with the fight against contraband, efficiently and with determination (as indeed it should, because they are part of its programme and target its domestic enemies), the income will be helpful for the application of its social and economic programmes.

In view of the successive positions that Greece has had to relinquish in the course of the negotiations, it appears that the country has achieved the little that could be achieved.

The negotiations between Greece and its European partners mark a milestone in the political tussle in the European Union since the reunification of Germany in 1990, between moving towards a Europeanised Germany or a Germanised Europe.

Germany has undeniably secured its basic goal: the enshrining of austerity as the fundamental dogma of the new European economic order, although political prudence and even self-interest have softened the application of the dogma, and may continue to do so in future.

Germany has openly tried to impose its convictions and its hegemony on Europe. Greece was only the immediate battlefield. Brussels and Berlin have been divided from the outset about how to solve the Greek crisis, but Germany prevailed.

However, the masters of Europe do not have any interest in “destroying” Greece, and so cutting off their nose to spite their face. They are satisfied with a demonstration of the asymmetry of power between the two sides, and the public contemplation of assured failure for whoever defies the status quo and supports any policy that deviates from the one true official line.

The problem with a Germanised Europe is not the preponderant role that Germany would play, but that it would impose a “Made in Germany” model of Europe that conforms to its own interests. That is how it would differ from a Europeanised Germany.

The Greek crisis has highlighted the ever-widening contrast between the values and ideals that we consider to be central to the European project, such as solidarity, mutual aid and social justice, and the new values that set aside basic aims like full employment, social welfare and equal opportunities.

It is paradoxical that Europe, which is apparently absent from or baffled by threats from the opposite shore of the Mediterranean, should take a harsh, tough attitude with a small partner overwhelmed by debt. It is also paradoxical that structural reforms are demanded of Greece, without admitting Europe’s own urgent need to redesign the eurozone and reframe the policies that have led to the poor performance of its monetary union.

The Greek crisis and the difficulties in overcoming it have a great deal to do with a design of the euro that benefits financial interests, particularly Germany’s.

The project neglected the harmonisation of tax policies and created a European Central Bank that lacked the powers that permit the U.S. Federal Reserve and the Bank of England to issue money and buy state debt.

As is well known, the ECB has made loans to European banks at very low interest rates, and they in turn have made loans to states, including Greece, at much higher interest. Government debts thus mounted up, and in order to pay they were forced to cut public spending.

Why does Europe persist in following failed policies while refusing to follow those that have lifted the United States out of recession? The only explanation is stubborn attachment to an ideological vision of economic policy that is devoid of pragmatism.

How can insistence on the path of error be explained at such a time? There may well be a quota of incompetence, but the basic reason is, as Nobel prize-winners Joseph Stiglitz and Paul Krugman affirm, that the goal of the policies imposed by the “Troika” (European Commission, ECB and International Monetary Fund) is to protect the interests of financial capital. And this is because the powers of political institutions, the media and academia, are dominated by financial capital, with German financial capital at the core.

Financial interests are essentially capable of shaping the decisions of European governance institutions. In the United States this subservience is less clear-cut, allowing hefty penalties to be imposed on certain banks, as well as the development of other economic strategies.

This is because independent mechanisms of control and oversight exist, the Federal Reserve has well-defined goals (whereas the ECB has spent years fighting the insistent threat of inflation), and there is democratic administration with the political will to resist.

In conclusion: the issue is to clarify what sort of Europe the citizens of Europe want, and what institutional changes are needed to achieve it.

And even more importantly, having seen the consecration of German hegemony over the Old World, what sort of German leadership would be compatible with a united Europe based on solidarity? Is this even possible? (END/IPS COLUMNIST SERVICE)

Translated by Valerie Dee/Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

PPC power station in Ptolemaida. northern Greece. Credit: Nikos Pilos

By Apostolis Fotiadis
ATHENS, Jul 9 2014 (IPS)

Plans by the Greek government to sell companies that handle the key resources of energy and water face serious obstacles and its policy to offer investors exceptional privileges in an effort to boost interest in privatisation is coming under strong pressure.

Privatisation is one of the ‘prerequisites’ of the Troika – the tripartite committee led by the European Commission with the European Central Bank and the International Monetary Fund – in exchange for additional bailout money that Greece is seeking to continue to avoid insolvency.

The Greek government recently announced plans to sell a 30 percent share of its Public Power Corporation (PPC), and create a new ‘Small PPC’, which will be sold to private investors.

The new company will take with it some key production sites, lignite mines, and hydroelectric and natural gas units. In addition, about two million customers will be transferred from the original company and will be obliged to receive services from the new company for six months.Tax exemption seem to be a vehicle the Greek government favours using in its effort to attract investors to the country.

The lucrative terms and assets accompanying the new company, described in the legislation that creates it, are already attracting many local investors as well as major foreign energy companies like Germany’s RWE as well as the French EDL and the Italian ENEL.

The plan has caused strong reactions in north-western Greek cities where communities depend heavily on employment created by PPC mines and electricity production plants. PPC unions decided to take strike action to protest the privatisation plans, but these were declared illegal. The Greek opposition has called for a referendum on the issue but it appears unable to gather the 120 signatures of members of parliament necessary for it to go through parliament.

Kriton Arsenis, an independent Member of the European Parliament, has asked the European Commission whether obliging customers to receive services from the company constitutes an illegal state subsidy. In response, European Commissioner for Energy Gunther Oettinger said that the Commission “does not have adequate information to deliberate on whether this constitutes illegal state subsidy”.

At the end of March, Arsenis submitted a similar question concerning the Hellenic Republic Asset Development Fund (HRADF), which has been set up to manage Greek privatisations, and met with a similarly evasive answer.

The HRADF has announced the sale of 100 percent of Hellinikon SA – which administers 6,200 acres of land occupied by the former Athens Airport of Hellinikon – to Lamda Development.

Arsenis pointed that Article 42 of Law 3943/2011 establishing Hellinikon SA states that the company “shall be exempt from any tax, duty or fee, including income tax, in respect of any form of income derived from its business, of transfer tax for any reason, and capital accumulation tax” and again asked the Commission whether this unjustifiable tax exemption constituted state subsidy.

European Commissioner for Competition Joaquin Almunia replied that “Greece has not notified the Commission about the alleged tax exemption measure”, thus the Commission does not have sufficient information to assess whether it constitutes state aid and will ask Greece to provide clarifications on the issue.

Tax exemption seem to be a vehicle the Greek government favours using in its effort to attract investors to the country. Last week, Greek Energy Minister Ioannis Maniatis said that oil and gas explorers would pay 25 percent tax, down from the current 40 percent, to attract them to help exploit Greece’s untapped offshore hydrocarbon resources. “We have done this in order to incentivise our investors to invest in the future of Greece” he told a conference in London.

Plans to privatise water utilities stalled last month after the Supreme Court considered privatisation of the Athens Water Supply and Sewerage Company (EYDAP) unconstitutional. Following this decision, the transfer of a 34.03 percent share of the company’s stock holding to HRADF has been cancelled and the privatisation authority has publicly admitted that it is reconsidering the tender despite still holding 27.3 percent of the company.

This has effectively cast doubts on the privatisation process for EYATH, the water and sewage company of Thessaloniki, Greece’s second largest city. HRADF President Konstantinos Maniatopoulos was quoted saying in Greek media that “it will be difficult to continue the process for EYATH without taking into account the decision for EYDAP.”

The Suez/Ellaktor and Merokot/G. Apostolopoulos/Miya/Terna Energy consortia had been in the process of submitting binding offers by June 30. It appears now that HRADF will return about 50 percent of the 74 percent of its share in EYATH back to the state.

Two weeks ago, the Greek National Commission for Human Rights produced a focus report about the protection of access to water. Kwstis Papaioanou, President of the Commission told IPS: “International experience has proven that privatisation curtails the access of people to safe water. It is very encouraging though that the water has united citizens against its privatisation.”

Privatisation of water has indeed provoked strong public reactions. In an informal referendum in Thessaloniki in which over 200,000 people took part, 98 percent voted against privatisation.

“The court’s deliberation against privatisation of water companies is very clear but I would not be surprised if the government finds a way to circumvent it. There are plenty of other examples in which they have not implemented court decisions,” Arsenis, told IPS.

“Those interested in Greek public assets do not think like real investors. They take an interest only in privileged deals when profits are guaranteed and when most of investment risk is undertaken by the state in advance so that they have secured income that will cover their expenses in two or three years’ time.”

A first privatisation target of 50 billion euros in revenue by 2020 has been cut by more than half, with the country’s lenders now forecasting 22.3 billion. So far, only 3 billion has been collected.  The 2014 and 2015 targets for revenue from privatisations were set at 1.5 billion euros and 2.24 billion euros respectively but these are now very unlikely to be achieved.

A Greek protester takes a step against austerity measures at a barricade in Athens. Credit: Infowar Productions/IPS.

By Apostolis Fotiadis
ATHENS, Feb 19 2014 (IPS)

A humanitarian crisis is unfolding in Greece and other recession-hit European countries as they undergo harsh austerity measures in exchange for a bailout. At the heart of it is the Troika, say trade unions, civil society and rights activists.

The Troika – as the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission (EC) have together come to be dubbed – represents international creditors.“The Troika ought to know now that they can’t hide any more behind their immunity in order to avoid Greek courts for the violations of human right in this country.”

It is increasingly being accused of demanding economic reforms that have driven insolvent countries in South-Eastern Europe into deep recession while undermining human rights.

The International Federation for Human Rights has completed a fact-finding mission in Greece aiming to assess the impact of the crisis on human rights and outline the need to hold accountable those responsible for violations.

“Our visit was aimed at collecting evidence that the austerity measures and structural reforms which the government has had to implement as a condition for bailout have led to a situation where not only economic and social but also civil and political rights and the very democratic foundations on which the state is built are under threat,” Elena Crespi, Western Europe programme officer with the Federation, told IPS.

“Our ultimate goal is also to warn against the risk that what started as a global economic crisis would turn into a global human rights crisis, whose effects can easily be foreseen but might be very hard to contain,” she said.

On Jan. 21, 20 trade unions, human rights and civil society organisations throughout Europe addressed Martin Schultz, President of the European Parliament, asking him to commission a report on the situation of human rights, the rule of law, and democracy in Greece.

“Reading the Charter of Fundamental Rights of the EU, it is hard to find a single article that has not been violated by the Greek government during the last three years as part of the policies it has implemented against its own people,” the letter said.

Greece has borrowed about 230 billion euros (315 billion dollars) in the last four years in exchange for a massive austerity programme overseen by the Troika. The policy has backfired, with the economy sinking into unprecedented recession and unemployment soaring to 30 percent.

Signatories to the letter included the European Association for the Defence of Human Rights (AEDH), an umbrella organisation of 30 groups in 22 EU member states, major Greek trade unions, the 167,000-strong Belgian private sector union CNE as well as smaller political and civil society organisations, including the European Attack Network and the Corporate Europe Observatory (CEO).

CEO has launched a new project called Troika-Watch, which aims to create a network of citizens to monitor the body that represents creditors in counties implementing austerity programmes. This will produce a monthly newsletter in nine different European languages.

A resolution proposed by the Committee of Legal Affairs and Human Rights (PACE) was adopted on Jan. 31 by the Parliamentary Assembly of the Council of Europe.

Its draft recommendations on the “Accountability of international organisations for human rights violations” proposed that “international organisations should be subject to binding accountability mechanisms and that their immunity should be limited.”

According to the Assembly, “member states should also be held responsible for the role they play in international organisations and by assisting them in implementing their decisions.”

Greek MP Notis Marias, a representative of the Anti-Federalist Democrats group in the Council of Europe, who has proposed some of the amendments, said, “The Troika ought to know now that they can’t hide any more behind their immunity in order to avoid Greek courts for the violations of human right in this country.”

Basic wages have reportedly gone down 22 percent since the austerity measures began, unemployment among the youth is over 60 percent and over one million people do not have any kind of medical insurance any more.

In June 2013, the IMF admitted mistakes in handling the Greek debt crisis that caused the recession scenario to deteriorate. But the Troika never produced an impact assessment report prior to requesting social reforms and fiscal measures.

Andreas Fischer-Lescano, professor of European law and politics at the University of Bremen, was appointed by the European Trade Union Confederation to examine the legality of memorandums of understanding (MoUs) signed between bailed out countries and their lenders. His conclusions came out at the end of January.

In a draft document, seen by IPS, Fischer-Lescano argued that “it is the Commission and the ECB which on behalf of Europe lay down the conditions that are driving millions of Europeans to despair.

“MoUs have to be de-legitimised. There is no obligation to implement illegal provisions. National courts and also international courts such as the European Court of Justice and the European Court for Human Rights and human rights committees will have to clarify this,” he told IPS.

“The legal struggle against austerity is just beginning. The aim must be to defend core principles of social justice in Europe.”

The Greek Council of State has already found unconstitutional an emergency property tax passed in Greece in 2011.

On Jan. 28, the special committee of inquiry appointed by the Economic and Monetary Affairs Committee of the European Parliament to evaluate the role the Troika played in bailed out countries visited the Greek parliament. It had previously stopped by in Cyprus, Portugal and Ireland.

In Greece, the head of the committee admitted the Troika had committed mistakes but said it fulfilled its role to save the country from bankruptcy. The committee will publish its findings before the European elections in May.

By then a new strong brinkmanship is expected to evolve around the future of Greece’s fiscal consolidation programme, given that the credit put aside for the country is almost used up.

An extra 15 to 20 billion euros (20 to 27 billion dollars) will be necessary to keep the country afloat but many believe this will not come in the form of a new MoU.

Already a German proposal is taking shape that aims to lower interest rates and extend repayment terms for over 50 years.

Economists say through such measures the political elite are hoping to tame public opinion, which in creditor countries is unlikely to tolerate a new loan for bankrupt Greece and which in Greece is steadily moving towards anti-MoU and extreme right-wing parties.

Poverty in Portugal has risen to levels that were unimaginable a year ago despite the bleak outlook forecasted by the harsh measures imposed by the troika of creditors in exchange for the country’s financial bailout.

An eatery in Lisbon offers cheap “troika” lunches to weather the crisis. Credit: Katalin Muharay /IPS

Unable to pay their bills or even meet basic food needs, thousands of families are facing dire times and turning increasingly to charities for assistance. Many do so secretly, however, ashamed to admit they have to resort to such means to get by.

The phenomenon has become so widespread that the impoverished middle class is starting to be known as the “embarrassed poor”.

This new poverty, caused by unemployment and the inability to repay bank loans, is also driving up the number of suicides, according to reports by Caritas, Food Bank and other social solidarity organisations.

According to figures from the National Statistics Institute, in 2012 a fifth of all Portuguese were living on less than 478 dollars a month, well under the minimum wage established by law at 644 dollars a month and 14 salaries a year.

In June 2012, a year after the troika – comprised of the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB) – stepped in with a bailout package, soup kitchens have sprung up across Lisbon, bringing back the “sopa dos pobres” served out by Catholic organisations to feed the poor in the 1950s.

Today long lines of people can again be seen queuing outside charity centres waiting to receive their only hot meal of the day.

Teachers around the country report alarming cases of middle-class children coming to school on an empty stomach, dizzy and even fainting from hunger, but trying to act normal so as not to be confused with poorer children.

Middle-class Portuguese people of all ages are finding it hard to accept the fact that their dream of attaining the upper middle-class status they had been working towards for the past two decades is slipping away.

Those efforts are, in fact, having the opposite effect, experts say. Buried under a mountain of unpayable debts, the middle class is sinking closer and closer to the lower class, which at 24.4 percent has increased two percentage points since 2009, in a population of 10.6 million.

According to the National Statistics Institute anyone with an income between 768 and 2,660 dollars a month is considered middle class, in a country where half the population earns less than 932 dollars. Officially, around 60 percent of the population falls within that definition.

“In Portugal, poverty is becoming part of the scenery,” João Pedro da Fonseca, a young unemployed electrician specialising in generators, told IPS.

After a decade on his own, enjoying a high standard of living, he had to move back in with his parents and depend on their meagre pensioner income, “with little hope of finding work” in his field.

Out of a job for nearly a year now and with no unemployment insurance, this 29-year-old Lisbon native believes “this is just the beginning of a long period of poverty, a terrible crisis that I’m not responsible for, caused by the usual powerful men.”

Marina Oliveira, a 26-year-old psychologist who has been unemployed for the past 13 months, told IPS that when a crisis hits — no matter where in the world — “poverty only comes calling at the doors of the most vulnerable.”

She survives thanks to her parents, who are helping her “until I can leave the country to follow my dreams, which sadly have become impossible in my country, where poverty is only going to get worse, as new measures are imposed to pay the troika back,” Oliveira said.

The troika granted the Portuguese government a total of 110 billion dollars to service the national debt, meet administration costs and, above all and despite great criticism, provide capital for its distressed banks.

Oliveira highlighted that other countries have also suffered “these crises imposed by the promoters of the consumerist dream, who never get stuck with the bill.”

“The most outrageous example of this is the United States, where some of the leading people responsible for the 2008 crisis, which later spread across the world, were invited by (President Barack) Obama to serve as advisers and consultants for his administration,” he said.

In “Portugal we have to live under the rules dictated by this enormously powerful troika, making us bow to a global financial system that is unscrupulous and completely heartless and that forces us to surrender our country to that pack of vultures that are the large banks.”

The latest statistics available indicate that in 2011 Portugal had a gross domestic product (GDP) of 214 billion dollars and its national purchasing power stood at 77.4 percent of the average purchasing power for the EU.

Preliminary data for 2012 reveal a drop of 2.9 percentage points in Portugal’s GDP, confirming the downward trend observed since the start of the crisis. From 2009 to the end of 2013 it will have dropped by a total of 7.4 percent, according to projections released by the Bank of Portugal on Jan. 15.

For the victims of the crisis, the last straw came on Jan. 10 with the IMF’s new recommendations.

In a document addressed to the Portuguese government, the IMF called for greater austerity, which is certain to affect an already besieged middle class that in 18 months lost almost 25 percent of its purchasing power.

The IMF recommends a new package of measures, with additional cuts in pensions and wages, in particular in sectors such as education, health and law enforcement.

It also recommends raising public hospital fees, firing 14,000 teachers, placing 50,000 elementary teachers in a mandatory relocation scheme and privatising public education.

In his Jan. 22 opinion column, featured in the Público de Lisboa newspaper, analyst José Vítor Malheiros noted that this policy of drastic cuts is applied “only to social areas, never affecting the benefits of the (wealthiest) one percent”, and it is aimed at “pleasing creditors and perpetuating Portugal’s dependence on the financial system”.

Among the many waiting in line at a Lisbon Employment Centre, a man in his forties told IPS that he comes to the centre every day in the hope of finding “any job they can offer me, because I have a 12-year-old daughter and we’re both going hungry.”

He agreed to talk to IPS but asked to remain anonymous “because I’d like to speak frankly and, if I give you my name, they’ll never give me a job.”

He also refused to give his profession or trade, merely noting, “I was foolish enough to think that a university degree would guarantee a decent future. But here I am, willing to take any job.”

“Portugal has been gripped by fear, a fear that’s spreading thanks to outrageous policies. And those who are lucky to still have a job are bending over backwards to please their bosses, afraid they’ll be fired and will have to join the ranks of the new poor.”

Thousands have protested against the austerity measures imposed on Greece by its creditors. Credit: George Laoutaris/CC-BY-ND-2.0

By Apostolis Fotiadis
ATHENS, Nov 9 2012 (IPS)

Ignoring the thousands of protestors gathered outside the Greek parliament on Wednesday, the government voted in public spending cuts amounting to 17 billion dollars in an economy already on its knees from a lacerated budget.

The government was promised 40 billion dollars of bailout money in exchange for the implementation of this fresh bout of austerity.

But the country’s creditors – the European Central Bank (ECB), the European Commission (EC) and the International Monetary Fund (IMF), known as the Troika – have fallen out over crucial disagreements about the terms of the financial “rescue” operation, resulting in a stalemate that has brought Greece to the knife’s edge.

It is obvious that a write-down of Greece’s 200-billion-euro debt, now owned by the European public sector, is sorely needed in order for Greece to avoid disorderly default.

In fact, a day before the election in the United States, even incumbent President Barack Obama threw his weight behind calls for a write-down.

But the EC and ECB are reluctant to accept losses, which the IMF has deemed “necessary”.

The handling of Greek debt has been a point of contention between the IMF management and European interests in and outside the Fund since Greece first asked its international creditors to rescue it from default back in May 2010.

Unable to survive its debt obligations, Greece entered into a 110-billion-euro loan deal with its eurozone partners and the IMF, conditional on the implementation of severe austerity measures.

The programme failed and the economy has all but imploded.

Peter Chowla, head of the London-based Bretton Woods Project, a non-governmental organisation that monitors IMF and World Bank activity, told IPS that it was obvious to most observers very soon after the program began that a second bailout agreement would soon follow.

He added “Even during 2010, many internal IMF reports warned that the Greek programme would not work out. Those were systematically ignored by the Fund’s leadership in order to present homogeneity of the Troika in negotiations with Greece.”

Meanwhile the main line inside the Fund gradually shifted away from European interests and closer to the positions of developing countries like India, Brazil and Russia, all of whom expressed doubts about the efficacy of the Greek plan.

Finally a compromise was struck between the IMF and the European financial institutions about the writing down of Greek debt to a level that might allow the programme to continue.

“In the spring of 2011, amid disagreements about the sustainability of Greek debt, the IMF warned, for the first time, of not offering any more money unless a debt restructure took place. European interests, inside and outside the Fund, finally had to accept this, but tried to limit their losses as much as possible,” Chowla explained.

In October 2011, the Troika offered a second 130-billion-euro bailout loan that not only demanded another austerity package, but also forced private creditors holding Greek government bonds to sign a deal accepting a 53.5 percent face value loss.

Soon after, it became clear that the second programme was wreaking havoc on a crumbling economy and would not put Greek public finances back in order.

And meanwhile, relations within the Troika kept deteriorating.

A confirmation of the depth of the fracture inside the Fund emerged this past July, when Peter Doyle, after two decades of service within the Research and Development branch of the Fund, resigned.

In his brief letter he criticised the IMF’s role in the Troika, blaming ‘European bias’ for constraining the Fund from exercising an impartial role.

Doyle charged that the IMF had compromised its independence, citing “suppression” of information that had been identified well in advance as a reason for the failure of the institution’s surveillance mechanism, which should have properly examined the impacts of the austerity plan.

Austerity shock therapy, according to Doyle, has caused the economy to disintegrate faster than expected and has brought “the second global reserve currency to the brink”.

Further evidence of the Fund’s responsibility in what is now a full-blown Greek crisis surfaced during the launch of the IMF’s autumn 2012 World Economic Outlook in Tokyo, where the IMF’s chief economist, Olivier Blanchard, acknowledged that the Fund’s surveillance models, used to dictate the terms of bailouts, were flawed.

Panagiotis Roumeliotis, Greece’s one-time representative to the IMF, confirmed to IPS that Doyle’s criticism is serious and valid.

He also provoked a high-profile investigation about the handling of the crisis by stating in an interview with the New York Times this August that the bailout plan was “condemned” from the start.

Domenico Lombardi, Italy’s former representative on the IMF’s executive board, says the impasse within the Troika is now reaching a total deadlock.

This August, the Fund refused to provide money to pay off a 3.2- billion-euro Greek bond held by the ECB, Lombardi told IPS. This was made up by an emergency bond sale by the Greek state.

A 5.5-billion-euro bond due to expire on Nov. 16 should be covered by anticipated bailout loans, but the IMF seems unwilling to participate in financing that either.

“Basically the IMF is not going to contribute in any meaningful way till the debt restructuring issue is agreed, formally or informally, explicitly or implicitly,” Lombardi told IPS.

He added that the entire joint programme would have to be restructured if the IMF pulled out at this late stage.

Given that the Greek economy will face an emergency liquidity problem next week, it hastily organised a short-term bond sale Friday to close the gap.

This debt is owned by the ECB, which has thus far refused to write down the debt or lower interest rates.

The situation has now become very dangerous, according to Lombardi.

The creditors may be able to buy some time “by lowering the interest rate on bailout money they have loaned to Greece,” he said.

But the most pressing issue is that none of the leading players seems to have any idea what is to be done in the long term.

(END)