Wednesday, February 18, 2015
Greece’s Loan-Agreement Bluff
Wall Street Journal
February 18, 2015
On Tuesday night, when Greek officials began briefing that they would seek an extension to the country’s rescue deal from the rest or the eurozone, they insisted journalists understand a clear distinction: “The request is going to ask [for] the extension of the loan agreement and not the bailout,” one of them said.
The difference, the officials explained, was that extending the loan agreement would give Greece access to its last installment from the eurozone’s bailout fund, the European Financial Stability Facility. But it wouldn’t mean, the officials stressed, that the government actually had to accept all the “toxic” austerity measures listed in the Memorandum of Understanding (the legal name of the document that has ruled Greek policymaking for almost five years).
This insistence on making that distinction gave some journalists pause. Was the government of Prime Minister Alexis Tsipras asking for money without any conditions, even though it had been told over and over again that that was a no-go? Or was this yet another euphemism, the proverbial old wine in a new bottle, similar to referring to the “troika” of the European Commission, the European Central Bank and the International Monetary Fund simply as “the institutions”?