New "masters" in the crucial Eurogroup

Will the change in faces bring a change of plans? Will it bring delays in decisions regarding the Greek problem at a time when our economy is at a crucial turning point?

The truth is that Athens is worried about by what our partners and creditors will do at the Eurogroup meeting, as its key issue is finding a solution to the so-called “Greek problem”, and worries about whether the absence of Dominique Strauss-Kahn as a regulatory factor will influence developments and possibly any decisions.

The official statement by those involved is that there won’t be a problem. Egyptian economist Nemat Shafik, a high-ranking member of the IMF, will fill Strauss-Kahn’s position in the Eurogroup negotiations table.

German Finance minister Wolfgang Schäuble was quick to clarify that the absence of the IMF head does not invalidate the proceedings or suspend the effort to find the “right solution” for the case of Greece.

Juergen Stark, one of the board members of ECB, insists that the meeting will include the issue of additional measures for our country and the drastic cut in expenditure “in order for Greece to meet the package terms for the next installment”. The Troika will keep on doing its job and the findings will determine the attitude and the decision of our partners. That is, if we will go to a new loan or attempt some form of debt restructuring.

However, there are some “grey areas” too. The markets will not wait for Strauss-Kahn while he is dealing with the American justice system and consequently remaining inactive regarding IMF matters. Even if we accept that the fund operates by plan and not on a personal level, it is certain that Strauss-Kahn had expressed his view on what had to be done and had a personal contribution to what was going on. His replacement won’t have this agenda or will not follow it. And this is for those who understand…

Besides, the modernization of IMF’s mechanisms, structures and philosophy in the last 6 years has been his creation, even if it was designed to serve his personal interests. But even so, it was under his leadership that the Fund developed its relations with Europe, handing out substantial funds that are now being used by Greece as well. And will be used again apparently, just like withPortugal and Ireland.

Moreover, and for those that don’t know, his temporary replacement, John Lipsky, is an American. And here is where the “this is for those who understand” quote applies…

In addition, Strauss-Kahn is a strong supporter of the issuance of Eurobonds in order to reduce the exorbitant borrowing cost for the heavily indebted countries. Prime Minister George Papandreou referred to this issue once more just yesterday, from Oslo. Nobody else in the IMF has publicly expressed similar positions and views.

Finally, and especially in the case of our country, when dealing with Strauss-Kahn, especially Strauss-Kahn the politician who wanted so much to become the next French president, we pretty much knew who we were dealing with, what we could ask for and what we would give in return. But nobody yet knows what line the new leadership team of the Fund will follow in our case. Thus…