A last-minute-agreement, with a significant political risk on the domestic front due to looming abandoning of SYRIZA’s election pledges, seems to be the most realistic and necessary option for the government. There are two key elements in the final stage of negotiations to consider, according to local and international political and financial factors, given the difficult economic circumstances.
The first element to consider is the concessions which the government will have to make – or is willing to make – that will affect the talks with the creditors. The government hopes to gain some political leeway in order to “pass” the agreement on the interior and then to be able to claim to have won something from the four-month negotiation. It has been suggest that labor reforms may offer such an opportunity.
The second key element that is expected to determine a lot is the new meeting between the Prime Minister Alexis Tsipras with Chancellor Angela Merkel. This meeting has been planned for 21-22 May in Riga, where the summit for the Council of Europe Facility for the Eastern Partnership will take place.
By the time that this meeting takes place Greece’s reserves will be at a critically low level. Furthermore, in the month that remains until the end of the loan agreement extension, the government will have had to have come to an agreement, while passing the relevant bills in Parliament and closing any elections, referendum matters or other such developments which may undermine the potential of the transition to “the next day”.
After Tuesday’s long-hour government council meeting, it appears that all thoughts of carrying out a referendum are being abandoned (at least for now). According to some government officials, there is not time to carry out a referendum, given the critical nature of negotiations.
