Cause and Effect in European Politics and Law

Greek economic plan lacks 5.5 billion euros

Ralitsa Kovacheva, June 23, 2011

Before being approved the Greek economic plan, worth 28 billion euros, is already insufficient. This has been revealed by the Troika team, sent to Athens this week, The Financial Times reports citing Greek officials. Before the plan is approved by Parliament next week, a "black hole" of 5.5 billion euros needs to be filled. As you know, the economic programme consists of cost reducing and revenue increasing measures, as well as structural reforms. Obviously, however, the situation in Greece is deteriorating so rapidly that the measures envisaged in the plan appeared to be insufficient only a month after being agreed by the Greek Government and the Troika.

Meanwhile, hours before the beginning of the European Council in Brussels, the leader of the opposition New Democracy, Antonis Samaras, said that his party would not support the economic plan. As you know, although it isn't a formal requirement, the adoption of the plan is a key condition of the EU and the IMF for granting the 12 billion euro tranche, so that Greece could cover the upcoming payments on its foreign debt.

Among other things, there are fears that new Greek Finance Minister Evangelos Venizelos has no financial experience and can relieve some of the measures for political reasons, an observer said, quoted by the FT. As euinside already wrote, in their conclusions the EU leaders will send a strong message to the Greek political parties to achieve a cross-party agreement on the economic programme.

Most leaders commented before the beginning of the summit that there was no alternative scenario for Greece, if the political forces did not come along among themselves. There was a full unanimity among all the heads of state and government, who stopped to talk to the journalists on their way in the Council building. In their words, everything so far is in the hands of the Greek politicians.