Tomorrow, Thursday, European Commission President Jose Manuel Barroso is expected to arrive in Athens. He will meet with Prime Minister Antonis Samaras. U.S. Treasury Assistant Secretary for International Finance Charles Collyns is also expected to arrive to convey -tovima.gr writes- US President’s concerns for the crisis in the Eurozone and the state of the Greek economy.

According to media reports, yesterday morning, a 12-member troika middle-level troika team visited the Ministry of Finance and had meetings with Yannis Stournaras’ staff. Sources so far suggest that the troika will not negotiate anything in terms of objectives, insisting on cuts in wages and pensions.

In official statements, Reuters reports, both the EU and the IMF have said the programme was behind schedule and needed to be re-launched before Greece could get any more funds, with the next tranche not expected to be disbursed before September. “An IMF mission will start discussions with the country΄s authorities on July 24 on how to bring Greece΄s economic program, which is supported by IMF financial assistance, back on track,” an IMF spokesman said on Monday.

EU Commission President Jose Manuel Barroso will meet Prime Minister Antonis Samaras on Thursday [July 26] in Athens to discuss the country΄s progress under the bailout plan. “Mr. Samaras and President Barroso… will discuss the overall situation in Europe and obviously particularly focusing on Greece,” EU Commission spokesman Alejandro Ulzurrun told reporters in Brussels. Barroso is also due to meet in the early afternoon July 26 with the leaders of the junior members in the coalition government, PASOK and Democratic Left leaders Evangelos Venizelos and Fotis Kouvelis respectively.

Barroso will also meet later Thursday with Development minister Kostis Hatzidakis, Employment minister Yannis Vroutsis and health minister Andreas Lykourentzos in view of the ministers’ meeting with the Troika chiefs on July 27, Reuters reports.

Addressing New Democracy party’s parliamentary group yesterday, Prime Minister Antonis Samaras said it is the government’s aim to proceed immediately with structural changes and reforms, aiming to reverse the climate for Greece abroad, kick-start growth and set the base for the renegotiation of the bailout agreement.

According to ANA, Samaras noted that this was the first time in the last 38 years (since the restoration of democracy in Greece) that there was a convergence on policy among three political parties that were focused on completing the full four-year term.

The second scenario is a “friendly” divorce with the Eurozone. According to this, the Greek government says it does not intend or it cannot implement the Memorandum, or Greece does not “pass” the next troika assessment. Then, the installments of the funding programme will simply stop and Greece will have to meet its funding needs from within. Then, austerity is intensifying, since Greece will remain with a primary deficit that it cannot serve through lending. However, the ECB continues to support the Greek banks and Greece remains in the eurosystem. Due to the lack of liquidity, a parallel bill will start circulating against “debt” in Euro (IOU – from the English phrase “I owe you”). The deposits are in euros, thanks to the support of the ECB, but progressively, new money replaced the old. In this scenario, the gradual disengagement of the euro could last for years, the rest of the Eurozone takes urgent steps towards further political and economic integration, while avoiding the “raid” in Spanish and Portuguese banks, since people see that even in the extreme Greek case, deposits do not change currency. Moreover, the eurozone as a whole continues to guarantee the stability of the banking system.

The worst scenario includes the new Greek government not only terminating the loan agreement and reversing the steps already taken, but appearing in full confrontation with the Europeans. Then the “hard” line will prevail in Brussels, which opposes any further support. In this case, instead of a hard landing to the new reality, according to the second scenario, Greece will face destruction. ECB will “pull the plug” from the Greek banks and the transition to a new currency will take place in disorder and panic. The process of issuing new currency will take months, during which there will be a real crunch in the economy. Invasions will take place in banks, while the new currency will have no exchange value and prestige abroad.

Withdrawal from the EU would be just one of the calamities that await the country, in this case. Also, even if Greece stopped repaying loans, the claims towards the country would remain, putting Greek assets abroad in jeopardy, and the country in an impossible legal and diplomatic position.

“Structural factors have changed the context within which the European social model operates: the growing competition from emerging countries, the reorganisation of production processes on a global basis, the speed of innovation, the increasing fragmentation of career paths with ever looser ties to a “permanent position”, the greater instability of families, declining fertility, the prospective decrease in the workforce, an ageing population. The set of risks faced by individuals throughout their life has changed significantly.

The social protection systems are therefore constantly evolving; substantial corrections have taken place in recent years in many countries, including France, the United Kingdom and Germany, the country where the reform process began a decade ago. In Italy, the recent pension reform which approves the full transition to a contribution system completes the necessary correction of the pension spending dynamics which was started years ago. As Germany shows very well, large and effective welfare systems can be made more efficient without compromising social goals.

We are living at a critical juncture in the history of the Union. The sovereign debt crisis has exposed serious weaknesses in the institutional framework; in this context, the difficulties in finding common solutions are having a negative impact on market valuations. The extraordinary measures taken by the ECB have gained us time; they have preserved the functioning of monetary policy.

But we have now reached a point where European integration, in order to survive, needs a bold leap of political imagination. It is in this sense that I have referred to the need for a “growth compact” alongside the well-known “fiscal compact”.

A growth compact rests on three pillars and the most important one, from a structural viewpoint, is political: the economic and financial crisis has challenged the myopic belief that monetary union could remain just that, and not evolve into something closer, more binding, into an arrangement whereby national sovereignty on economic policy is replaced by the Community ruling. If the governments of the Member States of the euro define jointly and irrevocably their vision of what the political and economic construct that supports the single currency will be and what the conditions to reach that goal together should be. This is the most effective answer to the question everyone is asking: “Where will the euro be in ten years’ time?”.

The second pillar is that of structural reforms, especially, but not only, in the product and labour markets. The completion of the single market and the strengthening of competition are crucial for growth and employment. Labour market reforms that combine flexibility and mobility with a sense of fairness and social inclusion are essential.

Growth and fairness are closely connected: without growth, and the events of recent months also reflect this, the temptation to “circle our wagons” gains strength, and solidarity weakens. Without fairness, the economy breaks up into multiple interest groups, no common good emerges as a result of social and economic interaction, and there are negative effects on the capacity to grow.

These reforms have long been indispensable in a global economy very different to the one which witnessed the creation of the institutions still operating today. In the political structure that will emerge from the crisis it is likely and desirable that for these reforms a system of European rules will be introduced similar to that for the fiscal compact, a discipline leading over time to the European harmonisation of objectives and tools.

The third pillar is the revival of public investment: the use of public resources to push forward investment in infrastructure and human capital, research and innovation at national and European levels. (The proposed strengthening of the EIB and the reprogramming of Union structural funds in favour of less-developed areas go in this direction).

Thus, a growth compact complements the fiscal compact, because there can be no sustainable growth without orderly public finances. In this regard I have noted on other occasions the extraordinary progress made by all governments of the euro area in terms of fiscal consolidation, but, once the emergency is overcome, they need to make improvements by cutting current spending and taxation.”