Fulfilling the deal will be big challenge

 Image aside, the gov?t will have a mountain to climb in order to meet its fiscal and political targets

By Dimitris Kontogiannis

The agreement in principle at Friday?s Eurogroup to extend the program reached by the government and the lenders was a major step in the right direction. Yet even if the agreement is successfully concluded by finding a mutually accepted list of reforms to be ratified by national parliaments in the next few days, there should be no doubt the road ahead will be bumpy.

With billions of euros reportedly leaving the banks last week, the government led by SYRIZA with junior partner Independent Greeks (ANEL) was clearly under pressure to reach an accord at the Eurogroup meeting. ECB President Mario Draghi?s intervention helped highlight the risks to the finance ministers of other eurozone countries as well. The Irish finance minister was clear when he said Greek banks would have faced sudden death if there were no deal.

No doubt the government will face opposition from within leftist SYRIZA?s party ranks and the right-wing ANEL. But Prime Minister Alexis Tsipras has repeatedly demonstrated his ability to weather political storms and keep his party united. Minor defections by one or more ultra left-wing factions should not be a big deal. They may even help strengthen his hand. Still, one should not underestimate the seriousness of the situation as the government is called upon to shelve some of its pre-election promises.

Undoubtedly, the government has based its communication strategy on the ?constructive ambiguity,? as Finance Minister Yanis Varoufakis put it, about the ?appropriate primary surpluses? this year and beyond. The government hopes it can avert unpopular pension and other spending cuts and tax increases...