Economy Greece seeks Eurozone recognition of economic progress

Greece seeks Eurozone recognition of economic progress

Greek Finance Minister Yanis Varoufakis speaks to journalists after a meeting with European Central Bank President Mario Draghi in Frankfurt, Germany
Greek Finance Minister Yanis Varoufakis speaks to journalists after a meeting with European Central Bank President Mario Draghi in Frankfurt, Germany

The Greek government is urging eurozone ministers to recognise progress made in talks, on the eve of major debt repayment to the IMF.

Eurozone finance ministers are meeting in Brussels on Monday to continue negotiations on a deal to release a portion of billions of bailout funds.

Ministers in Athens says they will honour the €750m (£544m, $834m) to the IMF due on Tuesday.

No breakthrough is expected at Monday’s talks, with many issues unresolved.

Its left-wing government has said it will not break anti-austerity electoral promises, something that has put the country at odds with European creditors.

But Greece, which has until the end of June to agree a new reform deal with its creditors, is hoping for a positive message from the meeting in Brussels, to enable the European Central Bank to restore liquidity to the country’s beleaguered banks.

“We want a clear confirmation of the progress that has been made in the last period of negotiations,” Prime Minister Alexis Tsipras told his cabinet, according to Ana news agency.

Eurozone ministers are not hopeful of a deal being struck.

“We have made progress, but we are not very close to an agreement,” Eurogroup chair Jeroen Dijsselbloem told the Italian newspaper Corriere della Sera.

“It will surely not be reached at the Eurogroup meeting on Monday,” he said.

However, its international creditors remain unconvinced that its alternative plans to raise money will be sufficient to pay the bills.

Hence this prolonged stalemate – which has stretched Greek state finances to the limit.

The pressure on the Greek government to do a deal is immense. But if the only deal available is one that means it will have to break many of its election pledges, it could face rebellion within its own party.

That means a referendum could be called in Greece on whatever deal finally emerges. It would become, by necessity, a vote on whether the country should stay in the euro, or default on its debts and leave.

Greece did meet last Wednesday’s deadline to pay €200m (£148m) in interest to the IMF but has had to call on local authorities and other public sector bodies to dig into their cash reserves to keep the government afloat.

The government is urgently seeking the final €7,2bn (£5.2bn; $8bn) tranche of its €240bn IMF/EU bailout in an attempt to stay afloat and reports say Mr Tsipras wants at least part of it to be released immediately.

Last week Greek Finance Minister Yanis Varoufakis told the BBC that he did not expect a deal to be agreed on Monday but said agreement could be reached “within the next couple of weeks or so”.

Mr Varoufakis also accused the eurozone of dragging its feet.

“Europe works in glacial ways, and eventually does the right thing after it has tried all alternatives.”

Although Mr Varoufakis will be part of Monday’s talks, he has not been leading the negotiations in Brussels, largely because of criticism of his abrasive style by eurozone counterparts.

One unnamed European negotiator told German newspaper Die Welt that the Greek negotiating team that had replaced Mr Varoufakis were more pleasant to deal with, but the substance of talks had not changed.

Last week, Greek MPs voted to re-instate thousands of civil servants who had been laid off under the previous government as part of austerity measures.

Deadlines, deadlines…

  • 12 May: Greece due to repay €760m of IMF loan
  • 15 May: Greece has to roll over €1.4bn worth of maturing 3-month Treasury bills
  • End of May: the country needs to find about €2.5bn to pay salaries and pensions
  • 30 June: The €240bn bailout agreement between the eurozone and Greece officially expires
  • June and July: €6.7bn due to be repaid to the European Central Bank

 

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