Compromise in works
Brussels meeting possible today as creditors said to prepare final proposal
Speculation swirled last night that Finance Minister Euclid Tsakalotos would meet with representatives of Greece’s international creditors in Brussels today in a bid to break a deadlock in bailout negotiations.
According to sources, creditors are preparing a final proposal for Athens foreseeing Greek authorities adopting fiscal measures equal to about 2 percent of gross domestic product.
The pressure from Greece’s creditors for additional measures and the apparent absence of a clear plan as regards the government’s next steps have fueled a sense of uncertainty and prompted apparently contradictory statements by government officials. Despite widespread speculation that the government is prepared to lower the tax-free threshold, Economy Minister Dimitris Papadimitriou insisted, in comments to the Wall Street Journal published yesterday, that authorities would do no such thing. Parliament Speaker Nikos Voutsis struck a similar tone yesterday, telling the TVXS news website that the government would not accept any measures beyond those agreed in 2015 and 2016.
However, one SYRIZA MP, Dimitris Vettas, yesterday suggested that the government could legislate contingency measures, in line with creditors’ demands rather than risking increasing uncertainty.
Already, the growing sense of uncertainty fu- eled by the impasse in negotiations has taken its toll. Greek banks have been bombarded with questions by depositors and a trend in savings returning to banks has reversed, sources say. Deposits are said to have plunged some 1.5 billion euros since the beginning of this year.
European officials and the International Monetary Fund reiterated their positions vis-a-vis Greece yesterday. The head of the European Stability Mechanism, Klaus Regling, said in an article in the Financial Times that the solution for Greece is to be found in reforms, not debt relief. The IMF’s Gerry Rice meanwhile insisted that debt relief is necessary but that the Fund’s support for Greece depends on reforms.