The Greek Dilemma Surfacing Again

It was hard enough for the European Union to reach a deal with Greece that allowed the country to stay afloat financially, keep its banks capitalized, and avert a once-unfathomable exit from the eurozone.

The more difficult part, though, is the deal's implementation. To get an idea of what this entails, take a cursory scan of the memorandum of understanding signed on Aug. 19 between the European Commission, the Hellenic Republic, and the Bank of Greece.

The document's five chapters, spread across 32 pages, tell a story of abject surrender. Greece commits to "prior actions" and "key deliverables" covering everything from cross-border withholding tax to rationalizing the payment process in the social security and health system. The memo tells the tale of how a nation-state will allow a supranational entity to rewrite the foundations of its economy. Its repeated references to "the authorities" (in this context, Greek bodies of law) are delivered in a tone approaching bureaucratic mockery.

As the latest tranche of funds from the bailout is disbursed, fears of rising unrest in Greece are playing out on the street. AP:

"Greek farmers protesting over planned tax and pension reforms demanded by the country's bailout creditors have clashed outside Parliament with police, who used tear gas to disperse them.

"Up to 4,000 farmers from various parts of Greece took part in Wednesday's protest in central Athens. The clashes broke out when some of the protesters threw bitter oranges that grow on trees around parliament at riot police guarding the building."

The farmers were protesting measures that will increase their tax burden and cut pensions. An equally delicate task that stands to affect a broader swath of society is set to be tackled when the Greek Parliament approves the deal on Nov. 19. Specifically, Greek authorities now are meant to tackle the problem of non-performing loans. The August memorandum explained the issue like this:

"Fiscal constraints have imposed hard choices, and it is therefore important that the burden of adjustment is borne by all parts of society and taking into account the ability to pay. Priority has been placed on actions to tackle tax evasion, fraud and strategic defaulters, as these impose a burden on the honest citizens and companies who pay their taxes and loans on time."

Greece now has to take aim at those strategic defaulters. In a country where one-third of housing loans are nonperforming, this is no easy task. Stratfor explains:

"[R]egulations currently in place protect many families who are behind in their mortgage payments. The creditors delayed the release of new funds to persuade Athens to make it possible for banks to auction a larger number of properties while improving ways to identify ‘strategic defaulters,' the people who are not paying their mortgages because they know Greek law protects them.

"According to the Nov. 17 agreement, only the most vulnerable 25 percent of households will be protected from eviction, while an additional 35 percent will receive different degrees of protection related to their annual income and the value of their property.

"This is not a minor issue. Greek banks are dealing with some of the highest rates of nonperforming loans in Europe, and any plans to restructure the sector will have to address the problem. In addition, the agreement stipulates that Greece has to come up with a plan for non-performing business loans in December. Athens will hurry to use the deal's 10 billion euros to recapitalize its banks as well, because tougher regulations over banking bailouts will enter into force in January.

"But Athens is also interested in protecting vulnerable families from being evicted from their homes."

Prime Minister Alexis Tsipras in September won snap elections on a much-diminished margin after taking a beating in negotiations with Brussels. But the results of those negotiations are only really being put to the test now. On one side, the release of funds from the European Stability Mechanism was delayed this month -- Greece was deemed not to be doing enough to comply with its agreements. But the two sides talked it out, with Eurogroup head Jeroen Dijsselbloem praising Greek authorities on Twitter.

Now that the funds are being released and Athens is attempting to comply, unrest could return to the Greek street. The Guardian:

"Prime minister Alexis Tsipras' government -- backed by the political opposition -- insist the law would hit the most vulnerable, dispossessing thousands of primary residences at a time of acute social hardship."

It's Tsipras' problem for now, but if all holds to form, Greece may well be back atop the headlines across Europe soon.

Across the Continent:

Jeremy Corbyn's ISIS-sized face-palm: The far-left leader of the United Kingdom's traditionally center-left Labour Party may be losing whatever grip he had on the loyalty of party stalwarts. The Daily Mail:

"Jeremy Corbyn was humiliated in the Commons today as his own MPs lined up to condemn him and his supporters as apologists for terrorists.

"The Labour leader was left isolated on the frontbench as MPs rushed to praise David Cameron's response to the Paris attacks."

Corbyn had said during a BBC interview on Nov. 16 that police should refrain from using deadly force against terrorists, and had added that the West was in part responsible for the troubles in the Middle East. Faced with the spectacle of his own party faithful stepping forward in a parliamentary setting to voice agreement with the leader of the ruling party, even Corbyn was forced to backtrack his own statements. But will it be too late? The Week has more on the bizarre spectacle that played out in Westminster:

"Pat McFadden, the shadow Europe minister, put this question to [Prime Minister] David Cameron: ‘May I ask the prime minister to reject the view that sees terrorist acts as always being a response or a reaction to what we in the West do? Does he agree that such an approach risks infantilising the terrorists and treating them like children, when the truth is that they are adults who are entirely responsible for what they do?'

"Cameron responded: ‘It is that sort of moral and intellectual clarity that is necessary in dealing with terrorists.'

"Ian Austin, MP for Dudley North, looked directly at Corbyn instead of Cameron as he said: ‘I agree with everything the Prime Minister said about Syria and about terrorism.'

"David Hanson, shadow foreign office minister, praised Cameron for setting out ‘with absolute clarity' that the government's first duty is to protect its citizens."
...

"‘He's a f***ing disgrace,' one Labour MP told the press after a fiery meeting between backbenchers and their leader last night where Corbyn sought to explain his pacifist views. Some left the 70-minute encounter shaking their heads, refusing to speak to reporters. One accused Corbyn of living in la-la land."

Europe's capital and Europe's capital of terror: Politico EU has been writing a lot on why so many aspiring terrorists choose Brussels as the city to launch their efforts. Today, Ryan Heath zeroes in on the Molenbeek neighborhood, blaming everything from the Schengen zone to the Belgian constitution and the proliferation of Salafist preachers in the city:

"One metro stop away from the center of Brussels and several minutes from the headquarters of the European Union, Molenbeek modernized so quickly in the 19th century that it won the nickname ‘Little Manchester,' after the world's then-leading industrial city.

"Now it's known as ‘Europe's Terror Capital' -- shorthand for the policy and police failures that enabled a string of terrorist attacks, including Friday's killing spree in Paris."

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