It looks like Greece has been strong-armed into accepting the terms of the Eurozone bailout. It seems like this bailout is not a bailout of Greece but of all the banks that lent money to successive Greek governments with seemingly little caution. Much of the bailout money given to Greece will immediately go out again to repay the banks, and the Greek people will be on the hook for repaying the loans with greater austerity measures.
To that end, Greece is expected to be forced to set up a separate account that would ensure it services its debt. This escrow account would give legal priority to debt and interest payments over paying for government services. That would maintain pressure on Greece to stick to promised austerity and reform measures and spare the eurozone the risk of a destabilizing default.
Not only that but the rest of Europe, led by Germany, is even telling Greece that they should postpone their elections, presumably so that a new government is not elected that would reject the deal. Wolfgang Münchau argues that if the Greek people want to preserve their democracy, it would be better for them to default on their debt.
It is one thing for creditors to interfere in the management of a recipient country’s policies. It is another to tell them to suspend elections or to put in policies that insulate the government from the outcome of democratic processes.