A fresh round of talks for a third bailout package are set to begin Monday in Athens, according to the International Monetary Fund (IMF) and the European Commission, even as the ruling party faces dissent from within its ranks.
The IMF, the European Commission and the European Central Bank are currently drafting the terms of a new bailout agreement of up to $94 billion that would help Athens avoid another default, but the so-called “troika” of creditors demand that the country institute major economic reforms, which include slashing pensions and weakening labor laws.
"The teams will arrive in Athens on Monday and meetings will begin immediately," a spokesman for the European Commission said Sunday, Agence France-Presse reported.
After previous talks ended acrimoniously and Greece held a referendum voting to end austerity earlier in the month, fears were raised of a Greek default that could trigger the country’s leaving the eurozone, a contingency known as “Grexit.”
However, hopes of further bailouts were raised after the ruling Syriza voted through two tough packages of austerity reforms demanded by Greece’s creditors, despite an internal revolt from within the leftist party. Syriza came to power in January on a strong anti-austerity platform, but its efforts to force the troika to yield to its demands have not yielded fruit.
The news of the fresh talks comes after reports over the weekend that some Syriza members were planning on using the country’s central bank reserves and reaching into taxpayer accounts to prepare for a possible return to the drachma. The move was reportedly considered by former energy minister Panagiotis Lafazanis and ex-finance minister Yanis Varoufakis, both of whom were sacked this month.
As the country struggles to cope with its beleaguered finances and political fractiousness, its economy continues to sink dangerously. Over a quarter of Greece’s working population, and almost half of its youth, are unemployed. Athens has instituted strict capital controls that restrict the rules for foreign money transfers and the amount of money that can be withdrawn from ATMs.
Greek Economy Minister Giorgos Stathakis warned in July that it could be "several months" before the country is stable enough to lift the controls. Athens has also called for humanitarian aid for the country’s citizens alongside the financial bailout package.