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Anastasia Balezdrova

A week after the meeting of finance ministers of the euro zone member states, at which their Greek counterpart Yanis Varoufakis put his signature under the general statement requesting an extension of the bailout, the government in Athens seems to be determined to fulfil the commitments just in words.

Only today, the ministers of Alexis Tsipras’ government announced changes aimed at restoring the old and corrupt policies that are far from being defined as reforms. These include the re-launching of the state broadcaster ERT and reinstating to work all the 2,600 employees who had been made redundant, abolishing the supreme council for the selection of personnel in the public sector, revising the project for expansion of investment in the gold mines in Halkidiki and conducting a parliamentary inquiry on the Memoranda of financial assistance.

At the same time, the country is threatened with the lack of money, while next month it has to repay the loan to the International Monetary Fund (IMF) that amounts to 1.5 billion euro. The government is preparing to bring money to the state funds by combating tax evasion and corruption, while the continuing outflow of deposits from the banks is making the situation even more difficult.

Business consultant George J. Prokopakis talked with GRReporter about the agreement in the Eurogroup, the future of negotiations with the lenders and the prospects for the Greek economy.

Mr. Prokopakis, what is the significance of the Eurogroup decision for Greece?

I think the decision of the Eurogroup states basically the following: "Let Greeks stew in their own juice since they have not yet decided what they want to do and how, or since they are not yet saying what they have decided, and since they do not want to observe their commitments. We are obliged to protect the euro and the banks." Therefore, the only thing that this decision has actually achieved is avoiding banking panic to allow for a balance in the banking system.

Everything else is in an even worse condition than in the period before the elections. The only thing the government has failed to attain, although according to some commentators Samaras, and any other Greek Prime Minister, would also fail to achieve, is reducing the primary budget surplus required in 2015 from 3% to 1.5%.

But this is something that, more or less, reflects today's reality. This 1.5% corresponds to almost 3 billion euro. Meanwhile, the incorrect actions and the reduced government revenues have increased the expected hole in the budget from 2.5 billion euro to 5-7 billion euro. This means that these 3 billion euro, which will be the result of decreasing the target of the budget surplus, virtually do not exist, because the state has no revenues. An example of this is that one of the first actions of today's government was to delay for one month the payment of VAT due in January. This is madness - on the one hand, there is no money in the treasury and on the other, you are telling those who are criminally liable if they do not pay VAT not to pay it.

But beyond my judgment, we have yet to see the consequences of the decision of the Eurogroup.

Greece's main problem is that it has no arguments to use during the negotiations and that it is cornered all the time. This whole thing with the negotiations over the past three weeks, the show and the rhetoric of the cabinet made no sense because the lenders had to do nothing but wait until last Friday, when the outflow of bank deposits would have been so significant that the Greek government itself would have had to close down the banks. This is why Minister of Finance Yanis Varoufakis changed his rhetoric at the specific meeting of the Eurogroup. The document, which he refused to sign at the previous meeting, claiming that it was different from the document originally proposed by Commissioner Pierre Moscovici, was ultimately better than the solution that he signed on 20 February. That is, as time passed, Greece was finding itself in a more difficult position.

This continues today, for the simple reason that money is used up while no measures have been taken to ensure the financing. Yesterday, President of the European Central Bank Mario Draghi said that Greece would receive about 1.9 billion euro from the profits from the Greek bonds only after the evaluation of the programme implementation, i.e. after the end of April. Therefore, now there is no source of funding. Currently Greece entirely depends on the goodwill of its European partners to allow it to issue more government bonds to pay both its obligations to the IMF in March and the salaries and pensions to the detriment of banks. Athens has to find a way to show "good behaviour" in the course of negotiations in order to stay afloat.

According to the State Minister, Greece may not be able to repay the loan to the IMF next month. Is there a risk of it failing to pay salaries and pensions?

The only source, in addition to the lenders, is state institutions such as social insurance funds. Although one of them yesterday refused to put money into repo transactions with government securities, the government will still be able to provide a certain amount. It is claimed that the total amount available to these institutions is about 3 billion euro. The government will be able to take half of it. The amount is in the form of renewable term deposits with maturity after 15 days or one month, which may help solve the problem of lack of liquidity. But this is a very temporary measure. If the negotiations with the lenders do not proceed well, things for Greece will become very bad by April.