Reform resistance may lead to fresh Greek election

Subject

Greece's bailout.

Significance

After a summer resisting creditor-demanded reforms, the Syriza-Anel coalition is once again scrambling to introduce 'prior actions', this time, to unlock a loan facility that otherwise expires at end-October. Its reluctance will be reinforced by the fiscal rigour that creditors are demanding to frame the medium-term fiscal strategy (MTFS) for 2016-20, which is scheduled for publication on October 3.

Impacts

• EU partners with outstanding bilateral loans will oppose a debt write-down.
• The economy continues to contract, albeit at a slower pace than previously, with strong growth not predicted until 2017-18.
• Privatisations and rationalisation of more than 100 billion euros in non-performing commercial bank loans are being delayed.