Complicating matters is Athens' promise to voters that the current reforms will eventually lead to some sort of debt relief, most likely in the form of longer maturities and lower interest rates. But several issues are delaying talks over this relief. For one, Athens does not want the International Monetary Fund to be involved in Greece's reforms after the country's current program with the institution comes to an end in March. The IMF is one of the toughest international organizations when it comes to implementing austerity measures, but it is also one of the strongest proponents of debt relief for Greece. Should the IMF be excluded from future negotiations, Athens' chances at securing debt relief will drop.
Added to the jumble of issues affecting talks is Europe's refugee crisis, which is straining Greece's relationships in Northern Europe as some countries argue that Athens should do more to stem the influx of asylum seekers into the European Union. Under pressure from the bloc, Greece has reluctantly accepted assistance from its Frontex agency in increasing controls along the Greece-Macedonia border. However, some politicians in Germany and other EU member states still believe Greece should be suspended from the Schengen Agreement, which eliminates border controls on the Continent. While debt relief and the refugee crisis are supposed to be separate issues, they will continue to be intertwined within the talks as Athens and its creditors use them as bargaining chips.
At this point, the Tsipras government still has a few factors on its side. Support for the far-right Golden Dawn and anti-austerity parties such as Popular Unity remains relatively low. Greece's 2016 calendar of debt maturities is not as pressing as 2015's, which at least somewhat reduces the likelihood of a Greek default. Capital controls that were introduced in the middle of last year to protect the banking sector are still in place, and Greek banks are in the process of recapitalizing. Still, the Greek economy is forecast to contract yet again this year, which means that social unrest will remain a threat throughout 2016. If prolonged protests and early elections ultimately take place, it could once again raise questions about the enforceability of Greece's bailout program and the country's membership in the eurozone.
