On Tuesday 28 July, Greece and its creditors began talks on a new bailout program. This followed the successful approval by Greece of two sets of reforms earlier in the past weeks, which was set as a precondition for the opening of the talks by the eurozone governments. The three institutions of the previous two bailout programs, the EC, the ECB and the IMF have now been joined by a negotiator from the eurozone´s permanent bailout fund, the ESM, from which Greece formally asked the new loan. While the past trio of creditor institutions was called Troika, the new quartet is beginning to be known as Quadriga. The Quadriga negotiators arrived in Athens to kick off the talks, which should be finalized in about two weeks´ time. Athens needs to repay another batch of bonds held by the ECB on 20 August – and by then all the institutions, eurozone governments and some eurozone parliaments will need to approve the new Memorandum of Understanding. The third Greek program is expected to be worth some €85 billion over the next 3 years.

However, even though an IMF expert joined the talks, the institution made it clear last week, that it would not participate in the next program unless the Greek debt is made more sustainable. According to IMF´s guidelines, Greece is currently not in position to repay its eventual financial aid – exactly because the horrendous debt burden of the country. Any restructuring will, however, be difficult. Germany, by far the biggest creditor, opposes any haircut of the debt.

Meanwhile, in order to get his party in line, Greek PM and SYRIZA boss Alexis Tsipras decided to call an intra-party referendum on the austerity reforms, which his government passed in the past weeks, though only thanks to the opposition. The current rebellion of up to 30 SYRIZA lawmakers is ineffective and only makes the party and the government fragile and the issue should be settled once and for all – that is how one can read Mr Tsipras´s decision.

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