After reading through the exchange of letters between Greece and the troika which are in the public domain and the impressions of various commentators it is now possible to get a tentative understanding of what has been agreed to. The document that all parties have signed is sufficiently ambiguous that different interpretations and spins can be placed on certain key passages thereby permitting both sides to claim victory or at least in the case of the Syriza government a partial victory.
For example the new government has agreed to tighten its campaign against tax evasion and corruption in order to ensure better revenue flows to state coffers thereby contributing to a potential larger operating surplus. In return the government has argued that the agreement permits it to run a smaller operating surplus as a percentage of the GDP thereby permitting it to run bigger programs aimed at helping the poor. The agreement also mentions the development of a food stamp assistance program. This may well permit the expansion of such a program into a major policy initiative which becomes a quasi parallel currency over time allowing for greater stimulus of the domestic economy. The increase in the minimum wage has been delayed until September but there will be no further pension cuts and reinstatement of public sector workers is maintained. The privatizations that have been completed will not be reversed and those underway including the Chinese purchase of part of the Piraeus port will be carried to its conclusion . However the minister of energy has reaffirmed his intention to halt the privatization of a state power company.
The agreement is not without its significant critics both on the left and on the right. Some politicians and journalists on the the left of Syriza have refused to support the agreement arguing it is a betrayal of the principles on which Syriza got elected. On the right the former governing party argues that the agreement is simply a repackaging of the old agreement and that the tax and anti-corruption measures were already being implemented by the former government.
Most of all however the agreement has given the new government four months of breathing space to develop an alternative economic strategy that finally permits Greece to escape from the destructive straight jacket of austerity and debt servitude.This may well be enough to ensure its support base in the difficult months to come.