Tsipras to pay over austerity U-turn?

The Greek government may be heading toward political trouble amid rising opposition within the ruling Syriza Party to the austerity measures accepted by Athens in return for loans as well as eloquent disapproval voiced by the majority of Greeks in a recent referendum, a report says.

A report by The Wall Street Journal on Thursday said the Greek government could be facing too much opposition from within the ruling leftist Syriza – which came to power on an anti-austerity platform, a situation that could potentially cost the government more than it can handle.

According to the report, a split in the incumbent left-wing party is widening as some of Prime Minister Alexis Tsipras’ fellow party members, among them former finance minister Yanis Varoufakis, are against a new bailout deal for the debt-wracked country.

The opposition is posing a serious challenge to Tsipras’ government as the 40-year-old top Greek politician is seeking to finalize the deal over the next month.

On Wednesday, the Greek parliament approved a sweeping and unpopular set of reforms demanded by creditors in return for the new bailout package.

Many believe that Tsipras is backtracking on his anti-austerity position, days after a referendum in which 61 percent of the participants rejected the demands by the country’s international lenders – the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – in return for fresh bailout loans.

The referendum result was favored by the Tsipras government, which called the vote in the first place in an effort to relieve itself of some of the pressure by the creditors.

This is while his government engaged in renewed talks with the creditors following the referendum to negotiate a new loan.

According to The Wall Street Journal report, the Greek premier may opt for a cabinet reshuffle by this weekend as part of efforts to overcome resistance from the several ministers who oppose the newly negotiated austerity package, and substitute them with those who are in favor of the deal.

Aimilios Avgouleas, a professor of banking law and finance at Edinburgh University, said, “I don’t see his government surviving beyond October. It will be impossible for him to do so under the weight of all this austerity.”

On Friday, the European Union (EU) formally approved a short-term loan of 7.16 billion euros (7.77 billion US dollars) to debt-wracked Greece as Athens and its creditors are working to reach an agreement on the new bailout package.

Greece received two bailouts worth a total of 240 billion euros (272 billion dollars) in 2010 and 2012 from the so-called troika of international lenders - the European Commission, the International Monetary Fund (IMF) and the European Central Bank -following the 2009 economic crisis.

The Mediterranean country is seeking a third bailout from the eurozone rescue fund in the hope of resolving its deepening financial crisis.

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