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EU pulls the plug on Greek debt relief. Parliament vote may lead to snap elections

EU finance ministers suspended debt relief measures for bailed out Greece in response to extra spending on pensions announced Alexis Tsipras.

On Wednesday Greece received some bad news from the EU, as the shell of a once great nation, continues to be dicked around by Eurozone finance ministers and a radical left buffoon Prime Minister.

Jeroen Dijsselbloem, the head of the Eurogroup that oversees Greece’s massive 86-billion euro bailout announced…

“The institutions have concluded that the actions of the Greek government appear to not be in line with our agreements.”

“Some member states see it this way also and thus no unanimity now for implementing short-term debt measures.”

In short, Greece will get zero debt relief in response to the Syriza government’s decision to spend €600 million towards Greece’s 1 million low-income pensioners…replacing a Christmas bonus scrapped by the Greek bailout supervisors.

Last week, Alexis Tsipras was celebrating measures agreed upon with creditors that would alleviate the massive debt through a series of short-term debt concession, which would help reduce Greece’s debt servicing burden by 20% points by 2060.

Now the short-term debt concession have been pulled off the table by Eurozone ministers. It’s a carrot and stick approach that is slowly destroying Greece. Tsipras has proven to be a completely ineffective Prime Minister, unable to manage a country in complete meltdown.

Tsipras has called for a roll call in Parliament Thursday over the pension Christmas payments.

Ekathimerini reports

The move by Tsipras seeks to stick to an election pledge to revive a Christmas bonus that had been scrapped by international creditors.

Given that polls have suggested that New Democracy holds a double-digit lead over ruling SYRIZA, several analysts have claimed that the impasse may lead to early elections, which is something Tsipras has not ruled out in recent comments.

Government officials have insisted that the measure will not impact fiscal targets but eurozone creditors, who were not consulted about the move, are demanding more information as to whether it will pose a threat to the country’s financial targets.

The eurozone’s tough reaction gained added significance as it came a day before the year-end European Union summit, where Tsipras is set to outline the financial situation of the Greek economy to other leaders.

Senior European officials said Wednesday the measures appeared to be in breach of the terms of the country’s third bailout, which was hammered out in July 2015.

Finance Minister Euclid Tsakalotos said that once Greece was given the chance to explain its case it would become clear that the measures are indeed within the bailout framework.

Opposition New Democracy hinted it could back the measures “on the grounds that they will help people” hard hit by the financial crisis, but denounced the way the government has handled the issue. The conservatives said they will decide Thursday if they will offer their support in Parliament.

“We have to help people. But it’s one thing to help weak people and another to do it in a way that endangers the country,” said New Democracy vice president Adonis Georgiadιs.

Meanwhile Greek bonds are surging on news that Greece’s debt relief has been put on hold.

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Zerohedge reports

Following the news, Greek bond yields surged back over 7% amid fresh concerns that the Greek crisis may be coming back.

Today’s fiasco follows a snafu overnight, when Euro zone officials hit back at the IMF on Tuesday for publishing an article on the way forward for Greece’s fiscal and economic policy that thrust into the open a row between the lenders over Athens’ bailout.

“The European institutions were surprised that the IMF staff published a blog post on the ongoing negotiations with the Greek government as new talks in Athens are starting with the aim of concluding the second review,” said a spokesman for the euro zone bailout fund, the European Stability Mechanism.

“We hope that we can return to the practice of conducting program negotiations with the Greek government in private.”

The IMF article appeared as the Fund and the euro zone struggle to find common ground on Greek policies that would allow the IMF to take part in the latest bailout, the third one since 2010 and now fully financed by the euro zone.

And so, more than a year after the third Greek bailout, one which was predicted upon further debt reductions and even more austerity, nothing has been resolved, and the tensions between the Greek government (and its people), the IMF, and the rest of the Eurozone finmins, are nowhere close to a resolution,

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Alex Christoforou
Writer and director forThe Duran - Living the dream in Moscow.

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