Greece's Memorandum of Understanding with the "Troika"

For those who haven't had the chance to browse through the MoU that Greece has signed with the troika (ECB, IMF and the European Commission) here is a link to a document (IMF Country Report No. 12/57) that includes it (page 152 onward).

The actual document is entitled "Greece: Request for Extended Arrangement Under the Extended Fund Facility—Staff Report; Staff Supplement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Greece" and contains more or less everything one needs to know about the greek economy, its assessment by the IMF staff, and the MoU that has been signed.

It will, of course, be interesting (and consequential at so many levels) to see whether the greek people decide to renege on, or abide by, their commitment to the terms of the bailout at the elections of June the 17th, 2012. 

They really have to choose between a rock and a hard place... 

Rock: Sticking to the terms of the bailout, achieving some concessions from the troika, staying in the EZ. Recession continues for 2-3 more years, ceteris paribus. 

Hard place: Reneging on the MoU, missing the next loan instalment, defaulting on debt, returning to the drachma. Massive uncertainty.

Problem with the Rock: this option is favoured by the same old parties that have been ruling Greece since the end of the civil war (except for seven years of military rule), and are responsible for the current drama.

Problem with the Hard Place: this option is favoured (implicitly) by a radical Left party that has never been in government, let alone having the responsibility of steering a nation to safe waters during a cataclysm. 

Today the greeks progressed in the euro 2012 football competition's quarterfinals against all expectations. Can they produce another surprise by returning to some sort of economic and social normality? It will take much more than the 90 minutes of a football game but it requires the same kind of spirit.