The Greek-Eurozone Austerity Battle Is Far from Over

Greece's accord with its Eurozone creditors is in danger. On Tuesday, Greek Prime Minister Alexis Tsipras told his cabinet to finish talks with lenders this week so Greece can get a new disbursement of aid being held up by a dispute over foreclosures and non-performing mortgages. It's the first major Greek dispute with lenders since Tsipras and his leftist coalition were re-elected in September. Eurozone finance ministers told Greek officials on Monday Greece would not get any more aid until it implements a series of reforms, the most important being a tighter foreclosures law for problem mortgages. Tsipras's office said he told his cabinet it is a "priority" to conclude negotiations and receive €2 billion in aid and another €10 billion to recapitalize Greece's four big banks. A European Central Bank stress test last month showed Greek banks need a total of €14.4 billion additional capital to survive adverse economic conditions -- €4.4 billion will come from private investors, with the rest from the €10 billion held in earmarked accounts. One banker said : "The newsflow on foreclosures created noise and is on the mind of some investors, but overall there is interest in the offerings. If there is a fast compromise, it will help." ~~~~~ Negotiations are stuck on the issue of protecting Greek mortgage holders if they fail to make payments. Greece insists that thousands of Greeks should not be put in danger of losing their homes, as happened in Spain. Now, mortgage holders can apply for foreclosure protection if the value of their home is €300,000. The Greek government wants protection based on a home valuation of between €180,000 and €200,000, with income-related criteria. Greeks losing their homes is a very sensitive issue now, as Greece struggles to shelter and feed thousands of Middle East refugees and migrants entering the country. ~~~~~ Life has been hard for Greeks caught by government efforts to manage the Greek economic crisis and EU demands. There are renewed accusations in Greece that lender-imposed austerity has crushed the economy, while the EU argues that Tsipras's leftists wasted improvements achieved by the prior center-right Greek government. ~~~~~ "Greece is making considerable efforts. They are scrupulously respecting the July agreement," French Finance Minister Michel Sapin told reporters, "France wants an agreement today." Greek officials stress that Athens wants to honor the bailout accord, but for reforms to work, they need to have social cohesion, which means not making life more difficult for poorer Greek citizens. An unnamed Eurozone official said : "There is always room for compromise but I don't think the ministers would accept rules that are much more favorable for people not paying their mortgages than in any other country." ~~~~~ Dear readers, yesterday thousands of Greeks were on strike against austerity, marching for the first time in a year, telling the Tsipras government it has not kept its promise to end austerity. There were grounded flights, hospitals with minimal staff, ships docked and public offices shut across Greece to protest the never-ending rounds of tax hikes and pension cutbacks under the bailout. Riot police fired tear gas in central Athens as youths hurled petrol bombs and stones, smashing shop windows and hitting the Greek central bank. Five years of austerity have killed economic activity - 25% of Greeks are unemployed. "My salary is not enough to cover even my basic needs. My students are starving," a protesting teacher told Reuters. Tsipras's own Syriza party said it supports the strike, because it strengthens their position. A retired teacher whose pension has been cut by 50%, is angry at Tsipras and the lenders. "I wish Tsipras had done what he promised but they didn't let him. Now we have turned into beggars for a plate of food." Tsipras accepted the unpopular terms of the third bailout when faced with the threat of an exit from the Eurozone. But, as in Spain and Portugal, the Euro remains a burden that bailouts worsen. The Euro/austerity battle is far from over.