Background

The Greek government and euro zone leaders are in the process of hammering out a last minute deal to secure bailout funding before a June 30^th deadline to pay a $1.8 billion IMF bill. This is just the first big maturation facing Athens in a summer that also calls for a 3.5 billion euro payment to the ECB in July and another 3.2 billion one in August.

The obstacles to a deal are well-known at this point. The Greek Syriza government came to power on a pledge to bring an end to austerity policies, and the Eurogroup of EU finance ministers wants to continue with an IMF-styled structural adjustment policy in which Greece further shrinks the size of its public sector to make the country more business-friendly.

These opposing standpoints are easily understood. The Greeks have seen their country’s GDP shrink by over 25% since the crisis began, and unemployment stands at 26.6% after over three years of austerity policies meant to improve the private sector. Despite the fact that it remains grossly inefficient, the Greek pension system is the only thing keeping a large swathe of society from homelessness and many pensioners have already seen their benefits cut from anywhere between 30-50%.