Tuesday

22nd Sep 2020

Clock ticking as Greece continues talks with creditors

  • Alexis Tsipras - wants an "honest compromise" but no "surrender" with creditors (Photo: consilium.europa.eu)

Talks between Greece and its creditors are continuing with just over a week to go before Greece is due to make a payment to the IMF and amid uncertainty over how much cash the government has left.

Greece handed in a list of potential reforms to eurozone officials on Friday and experts spent all weekend working on turning the ideas in something that will eventually trigger the release of a €7.2bn tranche of bailout money.

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"We're not there yet," European Commission spokesman Margaritis Schinas said Monday (30 March) on the progress of the talks. "This is why the talks should benefit from further fact-finding in Athens that should continue."

But he said the fact that they had spent the weekend working on them was a "positive sign". Economic affairs commissioner Pierre Moscovici told MEPs, meanwhile, that his department was working "day and night" to find a solution.

German chancellor Angela Merkel, speaking in Finland, said that Greece had leeway on what reforms it chose to undertake but that they must "add up".

A spokesperson for German finance minister Wolfgang Schaeuble underlined that the reforms talks were still in their early stages.

"We need to wait for the Greek side to present us with a comprehensive list of reform measures which is suitable for discussion with the institutions and then later in the Eurogroup," Martin Jaeger said.

Officials from eurozone finance ministries - the euro working group - is set to have a teleconference call on Wednesday (1 April) and are due to meet in person next week.

However, a eurogroup meeting of finance ministers is only expected to be called once there is something concrete to for them to agree.

Meanwhile the clock continues to tick. The Easter break falls next weekend while the following Thursday (9 April) Athens is meant to pay €450m to the International Monetary Fund.

It is unclear whether the €7.2bn of bailout money will be greenlighted before then. Nor is it clear how much time is left before the Greek government runs out of money. Euro commissioner Valdis Dombrovskis remarked over the weekend that that "liquidity situation is very tight".

Greek prime minister Alexis Tsipras appeared before national parliament on Monday evening but gave little detail on progress of the talks or what was in the package of reforms suggested by Athens.

“It is true that we are seeking an honest compromise with our lenders, but don’t expect an unconditional surrender,” he said, reports Kathimerini. He said the list included "short-term" measures to curb VAT fraud, as well tobacco and fuel smuggling.

Greek papers report there was a heated exchange between the radical left PM and opposition politicians over the actions of the Tsipras government to date.

Tsipras came to power in January on the back of election promises to stop austerity and get debt relief for the country.

However his eurozone partners have proved to be tough negotiators, saying no money will be paid out until "credible" reforms are on the table.

Greek ministers, meanwhile, say they have not given up on getting the country's debt - now at 177 percent of GDP - renegotiated.

"The government has not abandoned any claim regarding its aim to make the country's debt viable," Deputy Finance Minister Dimitris Mardas told financial daily Naftemporiki, saying solutions include a haircut or linking repayment to economic output.

Greece's creditors study new reform plans

Greece's creditors are studying new reforms put forward by Athens on Friday. Meanwhile, leading centre-right German MEPs have warned Greece not to seek help from Russia.

Analysis

Greece's cash-flow crisis

The general view amongst commentators and analysts is that Greece needs an agreement with its creditors by mid-April to prevent a default.

Leading German MP quits over Greek bailouts

A prominent German politician has resigned from his party and parliament in protest over coalition partner chancellor Angela Merkel's Greece politics.

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