Greek bailout: Eurozone pressure remains despite deal

EU and Greek flags flutter on top of the Greek finance ministry (24 Feb) Image copyright Reuters
Image caption Frayed nerves? EU and Greek flags flutter on top of the Greek finance ministry

It's hardly a ringing endorsement.

Following weeks of negotiations and meetings and increasingly short tempers, the Eurogroup has finally approved the Greek reform plan with a degree of enthusiasm that looks suspiciously like a damp squib.

After a one-hour conference call, and in language dripping in the froth of the Brussels bubble, eurozone finance ministers agreed that "the first list of reform measures presented by the Greek authorities... is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review".

Even this "starting point" still has to be approved by several national parliaments in the next few days, including a sceptical German Bundestag.

Assuming there is no further drama this week, the can has been safely kicked down the road and Greece should be able to fund itself until the summer.

But significant pressure is still on - from all of Greece's international creditors, including at least two of the three institutions formerly known as the troika.

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Media captionGreece bailout talks explained - in 60 seconds

Mario Draghi, president of the European Central Bank, said that "we will have to assess during the review whether measures which are not accepted by the [Greek] authorities are replaced with measures of equal or better quality".

And IMF head Christine Lagarde expressed concern that there was no clear Greek commitment to complete reforms agreed by the previous government under the terms of the bailout.

In particular she mentioned "pension and VAT policy reforms... [and] already-agreed policies for opening up closed sectors, for administrative reforms, for privatisation and for labour market reforms".

In other words, while many on the left of Syriza's radical left coalition think the government and its negotiators have given up far too much, its creditors seem determined to bargain it down still further.

What about our democratic mandate for change, Syriza supporters will cry.

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Image caption Eurogroup head Jeroen Dijsselbloem (L) has made it clear to Greece that it cannot take unilateral decisions
Image copyright AFP
Image caption IMF head Christine Lagarde was lukewarm in her response to the Greek reform plan

The answer came this morning from Eurogroup chairman Jeroen Dijsselbloem in the European Parliament.

"There can always be flexibility within a programme," he said, "but it cannot be a unilateral decision by [any] government to say we are no longer committed to these targets.

"That's not the way it is going to work."

When one MEP - Marco Zanni from the Italian Five Star Movement- sarcastically congratulated the Eurogroup chairman for "confirming that we are in a technocratic dictatorship", Mr Dijsselbloem was unmoved.

"In the Eurogroup, we have 19 mandates from 19 electorates," he said.

"You are mistaken if you think that one election result can change the way we work."

It was another reminder that when you join the Euro, or any single currency, you surrender a significant degree of economic - and therefore political - sovereignty.

It also means that there will plenty of difficult days ahead as Greece and the rest of the eurozone continue to negotiate in the coming weeks.