Papademos’ government will receive the Troika at the beginning of the new year, with its back up against the wall. Both the PM and the finmin know that the liquidity of the country is sufficient only for the bare necessities and that all will end on March 15. Then, Greece will have to pay for expiring bonds amounting to 15 billion euros. 

Along with some other expenses, the cash needs for the coming March reach approximately 20 billion euros. There are two paths in order for the country to avoid bankruptcy: 

  •     PSI and structural changes completion to receive the 80 billion of the 7th tranche
  •     ask for additional help from the partners

In both cases, the terms will be harsh for our country. 

Lenders want to safeguard their money, and for the rule “we’ll deal with the debt - you will deal with the surpluses”, they will ask for: 

  •    a state decrease which translates to more layoffs
  •    a reduction of the welfare state, ie smaller pensions and fewer benefits in health and education
And all this will take place besides the structural changes in labour relations, insurance issues, deregulation of markets, nationalizations etc.