Thursday

1st Dec 2022

Greece to force 'moment of truth' for creditors

  • Greek PM Alexis Tsipras wants an agreement with his country's lenders next week. (Photo: Consillium)

Greek prime minister Alexis Tsipras spent the evening in Brussels on Thursday (14 April) with Mathias Dopfner, the boss of the powerful German Springer media group.

Several journalists from Bild, Springer's tabloid and Germany's highest selling newspaper as well as long time critic of Greece, also attended the event. Greek officials said it was private but pictures were posted on social networks.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The dinner ended a two-day trip to Paris, Strasbourg and Brussels to gather support ahead of a week when Tsipras wants to force Greece's creditors to agree on a deal to unblock up to €5 billion of new aid.

Meeting with Springer's top brass could help boost German public opinion in the upcoming showdown with creditors.

Meetings with the French president Francois Hollande on Wednesday and the president of the European Parliament Martin Schulz on Thursday were more standard.

Both leaders said that the first review of the bailout programme agreed last August should be concluded quickly.

"We are very optimistic and satisfied," a source close to Tsipras' office told EUobserver.


"Hollande and Schulz are in line with our position. They seem to understand that what Greece has achieved is better than expected and that creditors should be able to take that into consideration."

Negotiations between the Greek authorities and the country's creditors - the European Commission, the European Central Bank (ECB), the European Stability Mechanism and the International Monetary Fund (IMF) - were suspended this week because of the IMF's spring meeting in Washington.

Deal 'within reach'

"We are very close to reaching an agreement. We have a credible package of measures that is ready," Greek finance minister Euklid Tsakalotos said on Tuesday after talks failed to lead to an agreement and were suspended.

“Finalising the review is clearly within reach," EU commission vice-president Valdis Dombrovskis said Thursday in Washington.

"Lots of work has been done in the last couple of months. Now if there is a will from all sides it can be done in a relatively short time," he said.

But the Greeks believe the will is missing from some in the "quartet" of lenders. That is why Tsipras and Tsakalotos decided to accelerate the process and put the creditors in face of a fait accompli.

At the beginning of next week, the government will present two bills to the Greek parliament, on pension reform and on tax policies. They will be tabled before any agreement with the quarter, which the creditors say is a violation of the programme's memorandum of understanding signed last year.

"The legislation will be passed by the end of the month and there is time to make adjustments," Tsakalotos said while announcing the move on Tuesday.

"It's right that we need to listen to the opinion of the institutions. But as a sovereign country, we have the last word."

'We cannot delay the process'

For the Greek government, the decision to go to parliament is a manner to put creditors in face of their responsibilities, the Greek contact said.

"It will be a moment of truth," when creditors will have to decide whether they want an agreement in the first review, the contact said.

"We can't afford to keep losing time. The content of the bill is completely in line with the memorandum," the source said.

"Because someone wants to delay the process, we keep discussing. We cannot delay the process."

The completion of the review has stumbled on the scale of the pension reform and tax increase to meet budgetary targets.

While the Greek government refuses to reduce current pensions, the IMF and the European institutions disagree on the means to reach the targets.

The IMF and the EU have "technical differences over the Greeks' capacities to ensure financial sustainability," finance commissioner Moscovici told Le Monde newspaper this week.

'Heroic effort'

On Thursday, IMF chief Christine Lagarde said that reaching the target of 3.5 percent of GDP primary surplus in 2018 set out in the memorandum would take a “heroic effort" and would not be sustainable even if met.

The IMF says that some kind of debt relief will be necessary to make Greek finances sustainable in the long run, but the Europeans, and especially the Germans, are wary.

The IMF also says the more far-reaching the reforms will be, the less debt relief will be necessary. But the Europeans do not want to impose new tough restrictions on Greece.

"The commission's feeling is that we have to reach a certain point of financial sustainability but also to respect a certain level of social stability," Moscovici said in his interview. "We won't ask for additional effort."

No date has been set for the return of the creditor's negotiators to Athens. But informal talks are being held in Washington, where all main EU and IMF officials are gathered.

By bringing the parliament in the game, Tsipras wants to outpace the quartet. His decision was partly influenced by a leaked discussion between IMF officials earlier this month.

In the alleged phone call, the officials discussed the possibility of an "event", namely a liquidity shortage, that would force Greece to accept the fund's conditions for an agreement on the review.

Greece is due to repay €10 billion to the ECB in June and July and needs a deal before that.

With the expected debate and vote in the Greek parliament and an informal meeting of eurozone ministers in Amsterdam on Friday (22 April), next week will be crucial to avoid a repeat of last year's spring and summer Greek drama.

'Don't expect any deals' on Greece today

Eurogroup chief Dijsselbloem said he's hearing "good news" from Athens but ruled out quick deal on new loans. Some economists warn Grexit is still a threat.

Agenda

EU to give first report on Turkey deal this WEEK

A month after the European Union and Turkey agreed on the details of a plan to stem the flow of migrants, the implementation of that plan will be discussed in the EU structures this week.

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  4. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  5. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  6. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos

Latest News

  1. Belarus dictator's family loves EU luxuries, flight data shows
  2. How Berlin and Paris sold-out the EU corporate due diligence law
  3. Turkey's EU-funded detention centres ripe with abuse: NGO
  4. In green subsidy race, EU should not imitate US
  5. EU Commission proposes suspending billions to Hungary
  6. EU: Russian assets to be returned in case of peace treaty
  7. Frontex leadership candidates grilled by MEPs
  8. Portugal was poised to scrap 'Golden Visas' - why didn't it?

Stakeholders' Highlights

  1. European Committee of the RegionsRe-Watch EURegions Week 2022
  2. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  3. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  4. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  5. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  6. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022

Join EUobserver

Support quality EU news

Join us