Tuesday

26th May 2020

Greece and lenders try to avoid 'brinkmanship'

  • Tsipras will try to get political support from Merkel in Brussels on Thursday (Photo: Bundesregierung)

With an agreement between Greece and its lenders at Friday’s (24 April) Eurogroup meeting in Riga now excluded by EU officials, both sides are trying to defuse tensions to prepare a deal for the coming weeks.

Greek prime minister Alexis Tsipras is set to meet German chancellor Angela Merkel in the margins of an EU summit on immigration on Thursday.


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Tsipras is trying to get political support from the major EU players as Greece continues to barter with creditors over what reforms it needs to undertake in order to unlock a €7.2 billion tranche of bailout money.

"I see more progress in the negotiations," Eurogroup chief Jeroen Dijsselbloem told Dutch TV RTL Z on Tuesday (21 April).

"We have to reach agreement in the coming weeks," he noted, adding that it is in "the interest of Greece and the eurozone as a whole to avoid" the country leaving the eurozone.

In Athens, Greek finance minister Yanis Varoufakis also expressed optimism, saying "there is clear convergence" between his government and representatives from the EU and the International Monetary Fund (IMF).

"There will be a deal, a comprehensive agreement," he said.

In Brussels, an EU official tried to reduce the focus on deadlines, which have been shifting on an almost daily basis.

"The use of deadlines, which leads to certain brinkmanship and unnecessary excitement, will not be done again," he said.

Friday’s Eurogroup meeting in Latvia was, for the past few weeks, deemed crucial amid concerns about Greece’s financial capacities and a risk of default in mid-May if no new loan was agreed.

But last week, EU finance commissioner Pierre Moscovici said the next Eurogroup meeting on 11 May would be "decisive" if nothing happened in Riga.


The 11 May meeting has been planned for a year and is "not a new deadline", said the EU official.

"The most important deadline is end of June, when the adjustment programme expires," he noted, adding that "the big question is: Is there agreement on the fiscal situation?”.

Talks between Greek, EU, and IMF experts have been going on since Saturday and technical talks between euro countries will take place in Brussels on Wednesday.

"There are still disagreements, but there is no huge ideological fight," said the EU official.

"What are the 70 percent [of the programme] Greece said were acceptable and the 30 percent acceptable? When we have a firm picture of that, we’ll discuss that. But preconditions for having discussions are not there”.

Meanwhile, the Greek government’s decree published Monday ordering public bodies to provide funds to the central bank was seen in Brussels as a way to better manage Greek finances rather than as a desperate move to buy time before a default.

Concerns over a Greek default remain high, however, with EU Commission Jean-Claude Juncker maintaining pressure.

"We are absolutely not satisfied with the course of talks so far," he said in Vienna on Tuesday.

"There is urgent need for greater efforts on the Greek side to be able to conclude this matter in our mutual interests”.

Greece raids public sector coffers to pay pensions

The Greek government is forcing the transfer of public sector money to the central bank so it can pay pensions and salaries as the impasse with its international creditors continues.

Tsipras asks for quick deal

The Greek PM met with Angela Merkel and Francois Hollande Thursday to try to shore up political support in talks with the country's lenders.

Eurozone slams door on Greek hopes

Greece is no closer to agreeing a new deal with its eurozone creditors after the latest round of talks broke up acrimoniously, with one fellow minister describing the meeting as a "complete communication breakdown".

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