Why hasn't Greece drawn down the bailout package?
Despite news that the European Union has put aside €30 billion and the International Monetary Fund will step forward with more financial assistance there is puzzlement amongst many people as to why the Greek authorities have yet to draw down on the bailout package on offer. So why have the Greek authorities decided to go alone at this stage?
It is becoming more and more apparent that the Greek authorities do not believe the terms of the proposed bailout packages are in the best interests of the country. There is unrest within the public sector, where job cuts are certain, and unrest amongst the private sector where tax rises will need to come in to cover the budget deficit. There is also the fact that the Greek authorities know fine well that the European Union can ill afford for the economy to collapse as this could have a domino effect on the rest of Europe.
As we have mentioned on numerous occasions, we are effectively playing a high-stakes game of poker with each party unwilling to show their hand and make the first move. The political gestures by the European Union, such as the €30 billion bailout package, have done very little to sway the Greek authorities and concern is creeping back into investment markets.
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