All eyes on talks over bailout plan for Greece

By MoneyTimes

Jul 28, 2015 08:19 AM EDT

The delayed talks over a third 85 billion euro bailout plan is set to take place on Tuesday. Syriza government led by Prime Minister Alexis Tsipras will hold negotiations with European troika, the tripartite committee led by the European Commission (Eurogroup), European Central Bank (ECB) and International Monetary Fund (IMF).

UK-based Independent news website calls the latest move as a dramatic capitulation after Greece was almost forced out of the eurozone two weeks ago. It assumes a greater significance after Greece's left-wing leadership decided not to deal with the hated 'troika' of its international creditors. The talks on latest bailout have been delayed by a week are now set to take off.

Labour Minister Giorgos Katrougalos dramatically pointed, "At the point we have reached, we are obliged to negotiate. Faced with the prospect of financial collapse, we were forced to compromise."

The Greek Prime Minister Tsipras is under pressure over reports of covert Syriza drachma plan.  A quarter of the party's 149 lawmakersturned against the bailout plan to pass sweeping austerity measures, posing a major challenge for Tsipras to keep the party members together.

Some of Greece's leftist government wanted to raid central bank reserves and hack taxpayer accounts to prepare a return to the drachma, according to news reports spread on Sunday indicating worsening conditions in the ruling Syriza party.

Tsipras reluctantly accepted to keep Greece in the euro and holding negotiations with troika on Tuesday. 
Some support Tsipras as his U-turn is justified considering the fact that there's no other option.

The "political brinkmanship, as Bloomberg suggested, has been the bane of getting Greece's economy back on track since the first bailout by European Union and International Monetary Fund in 2010.

Then the opposition leader Samara refused to support the first bailout plan and kept back support for a second rescue as well. This eventually led to referendum.

Reeling under severe pressure of recession, unemployment, and austerity, Greece has been resenting the troika for the past five years. Greece considered the troika as an invasion of its sovereignty. Over the time, troika was rebranded as 'institutions' and talks were held in Brussels rather than Athens, reports Independent.

IMF has reportedly scrapped its 28 billion bailout plan, which was supposed to run until March. However, Athens had sent a request to IMF for a new rescue plan.

Greek Parliament this month passed reforms bills in two rounds. Creditors are insisting that these two rounds are prerequisites for commencing the negotiations. Creditors are also proposing some conditions on bridging loans from the EU.

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