By Michael Ioannidis

Few elections have as their core issue an international arrangement. The Greek election of 25 January 2015 was one of these exceptions. In 2010 and 2012, Greece agreed with its Eurozone partners and the IMF to accept two large bailout packages conditioned on the fulfilment of far-reaching, austerity-oriented reforms. It also agreed to submit to a monitoring mechanism comprised by officials from the European Commission, the IMF, and the ECB that would supervise its compliance with the conditions and regularly revise them. This monitoring and rule-making structure became known as the Troika.

The second of the bailout agreements, concluded in 2012, was due to expire on 28 February 2015. Unlike Portugal or Ireland, Greece had not established access to the bond market by the end of its Adjustment Programme. Ending international financing support at the end of February would thus possibly prompt a Greek default. What the next step after the expiry of the 2012 bailout programme should be was put to a national vote on 25 January.

This post will offer an overview of the recent major developments concerning the Greek part of the Eurozone crisis. It will discuss how the Greek government tried to challenge basic elements of the new European economic governance and the outcome of this challenge. In the first part of the post, I present the starting position of the new Greek government (1.), then the legal and political context in which the negotiations took place (2.), and finally the agreement of 20 February 2015 (3.). In my conclusion, I take the position that opponents of austerity should wait to celebrate a victory. “Strict conditionality”, the necessary counterpart of financial assistance according to EU law, proved to be much stricter than many actors thought, both in economic and institutional terms (4.). Continue reading →