Battle for Europe
Late last week the Greek Parliament bowed to Berlin’s will and voted to support a package of austerity reforms. This step will come at a steep political price, as it will deepen the split in the ruling SYRIZA party. According to the British newspaper The Guardian, Panagiotis Lafazanis, the leader of the party’s Left Platform and former energy minister, has pledged to «smash the eurozone dictatorship», and Zoe Konstantopoulou, the speaker of the Hellenic Parliament, has stated that she is «not going to support Prime Minister Alexis Tsipras anymore».
The economic cost of this decision will be even higher for the Greeks. Greece will receive its initial 13 billion-euro payout from its third aid package, which totals 86 billion euros, but is now once again being managed from abroad: a trio of creditors - the ECB, IMF, and European Commission - will continue their routine oversight of the Greek budget.
In addition, Greece has pledged to uphold its tax reforms, make it easier to lay off employees, put an end to early retirement, and liberalize the markets for natural gas and pharmaceuticals, as well as housing and utilities. Several measures that could be dangerous for the Greek economy, such as an increase in VAT taxes on tourism in the islands, were approved by Parliament back in July. All this will exacerbate unemployment and raise the cost of living.
