“You will get the 5th installment. As for the 6th…”

The Troika seems to be ready to overlook the government’s failures and poor performance as long as it can secure new commitments and broader consensus for tougher austerity measures, in order to gove the go-ahead for the 5th installment of the 110bil euro loan.

The Troika heads, which are already in Athens, will start today one of the most crucial rounds of negotiations since the signing of the memorandum.

With the government showing signs of disintegration due to heavy reactions against the handling of the situation by the economic team, and with the budget hole grown by almost 500 million in April and now reaching 2 billion in total, auditors won’t have much to say to Giorgos Papakonstantinou apart from requesting additional measures to save up to 6 billion starting from this year.

The bargain for the mid-term austerity program comes to the foreground and will be essentially finalized in today’s meeting with the staff of the Finance ministry.

A year after signing the memorandum, the fiscal policy program seems to have reached its limits and as everything indicates, we will be asked for new adjustments and “surgical” interventions.

The envoys of the lenders seem willing to disregard the complaints and criticism about the plunge in the governmental performance, as long as they achieve a broader consensus on the mid-term austerity program.

Any safeguards that will be required of the government do not seem sufficient since, as observed by the auditors themselves, there has been no substantial progress since the last inspection, the numbers are constantly dropping and restructures are stuck at the level of announcements.

Under these circumstances, it seems we will get the fifth installment. However, the sixth installment is now being negotiated, along with the terms of our apparent application for a new loan in order to meet the needs of 2012-2013.