With only 12 days to go before the bailout window shuts, the wrangling over a deal to keep the country afloat will be discussed at an emergency EU summit tomorrow
“Tsipras issued a dovish statement this morning indicating that he will blink and come to an agreement,” said Miranda Xafa, a former Greek IMF representative who now runs a consultancy in Athens.
“The Greek premier overplayed his hand, believing Greece is systemic and creditors would accept his demands for fear of contagion.”
With the spectre of capital controls looming, key players deciding Greece’s fate voiced their exasperation with the country’s top negotiators, while the silence of others like German Finance Minister Wolfgang Schaeuble spoke volumes.
“The key emergency is to secure a dialogue with adults in the room. What we lack is a dialogue,” said IMF managing director Christine Lagarde after listening to Greek Finance Minister Yanis Varoufakis in Luxembourg on Thursday.
Varoufakis said “regrettably, no discussion of our proposal took place within the Eurogroup”.
“Even more regrettably, instead of that essential discussion, we observed pernicious ‘leaks’ to the press regarding Greece’s banking system,” he said.
Greece and its creditors – the ECB, the IMF and the European Commission – seemed further apart than ever after four hours of closed-door talks. Without a settlement, the ties still binding Greece to the currency bloc might begin to unravel with funding keeping Greek banks afloat under scrutiny. In central Athens, television cameras swarmed around banks, although business wasn’t any brisker than usual.
Increasingly isolated among his European peers, Tsipras was in St Petersburg to meet Russian president Vladimir Putin this week. Greek and Russian officials discussed a preliminary agreement to extend OAO Gazprom’s Turkish Stream pipeline to bring Russian natural gas to southeastern Europe.
Twelve days left
While Greece still has 12 days left before the bailout window shuts, the need for some parliaments to sign off on any agreement means it’s already too late for them to access aid in time to pay the IMF about $1.7 billion (R20 billion) at the end of the month.
This is according to Jeroen Dijsselbloem, who leads the group of European finance ministers. “Let’s say that we do reach an agreement. “It’s unthinkable that the implementation and then disbursement will also have to take place before the end of the month,” said Dijsselbloem. “That is simply impossible.” To at least get some money, Greece will now have to look at extracting an extension of its bailout agreement at an EU summit tomorrow.
The meeting will put Tsipras and German leader Angela Merkel, who has tried to smooth out tensions, in the same room.
That EU summit will start in Brussels, Belgium, at 7pm.
As Malta’s finance minister, Edward Scicluna, put it, the problem is that nobody “wants to pull the plug”.
COUNTDOWN TO GREXIT
A former IMF representative believes that Greece’s
Prime Minister Alexis Tsipras will blink and come to an agreement