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Source: Athens eyes law to repeal agreement with creditors if latter don’t bow to debt relief demand

By G. Kampourakis
[email protected]

The Tsipras government is considering the drafting and passing legislation that will cancel out prior actions – all 140 of them – included in a pending agreement to finally conclude the second review of the Greek program, if creditors do not extend more debt relief for bailout-dependent Greece past 2018.

The prior actions were detailed in a draft document that was disclosed on Monday, which is called a “supplementary memorandum”. The entire package will be tabled in Greece’s Parliament on May 16, with a vote coming no later than May 18.

The threat of abrogating the latest round of austerity measures and reforms has been repeatedly voiced over the recent period, including by Greek Prime Minister Alexis Tsipras on more than one occasion.

The same position was echoed by a close Tsipras aide on Tuesday, when asked if the Greek premier’s “political commitment” will materialize in case creditors decline to fulfil the leftist-rightist coalition government’s demand for more debt relief over the medium-term.

“… without an agreement over medium-term measures for the debt, the prior actions that were agreed to between the (Greek) government and the Institutions (Greece’s institutional lenders) will not be implemented … we will react using the only action at the disposal of democracies,” was the statement by the government official.   

In an immediate clarification, the same official said the reference does not include the possibility of snap elections or another referendum, but rather in tabling a precautionary bill that would repeal whatever measures are passed this month.

The current government has repeatedly and vociferously ruled out snap elections, a position reinforced by the fact that Tsipras and his ruling SYRIZA party trail main opposition New Democracy party by double-digit percentage points in all mainstream opinion polls over the past few months.

The same source declined to respond to questions over whether creditors have been informed of this position.  

Another point of contention, again according to sources close to the Greek government, is the prospect of primary budget surplus targets of 3.5 percent of GDP extending to 2022, something that was clearly stated in the “supplementary memorandum”. The leftist government, sources claimed, has never accepted such fiscal targets extending to 2022.

The “spin” from the Greek side is that the published document is only a “draft”, one of many in existence. Government sources maintained that the number of years that the fiscal target will be applied, and the level of the primary budget surplus, remains a point of discussion in ongoing negotiations ahead of the May 22 Eurogroup meeting.

Finally, the same sources said the final document will be the one presented to Euro area finance ministers on May 22.