Greece steps up diplomacy to avert cash crunch
German FM says the issue of whether Germany should pay reparations to Greece for the Nazi occupation during World War II had been settled
Athens/ Brussels/ Berlin, May 5: Greece stepped up diplomacy with euro zone partners on Tuesday to try to avert a potentially catastrophic funding crunch this month, when it must make a big debt repayment to the IMF as cash reserves dry up.
Ministers were travelling to Frankfurt, Brussels and Paris to plead for a loosening of the financial stranglehold on Athens after leftist Prime Minister Alexis Tsipras spoke by telephone to German Chancellor Angela Merkel, Europe’s pre- eminent leader.
“They discussed the course of the negotiations in Brussels and exchanged views on the issues of Greece’s deal with its lenders,” a Greek government official said of the call on Monday night, without elaborating.
Intensive talks continued with the International Monetary Fund, European Commission and European Central Bank on a cash- for-reform deal but there was no sign of a breakthrough on key differences over pensions, labour reform and the minimum wage.
In a goodwill gesture, a senior privatisation official said Athens was ready to finalise a 1.2 billion euro deal with German operator Fraport to run regional airports and to reopen bidding for a majority stake in the port of Piraeus.
European economics commissioner Pierre Moscovici said the aim was for euro zone finance ministers to be able to officially register “strong progress” in the negotiations when they meet next Monday but did not suggest a deal was possible by then.
The political uncertainty prompted the Commission to slash its forecast for 2015 Greek economic growth to 0.5 per cent from 2.5 per cent just three months ago. It also cut its estimate for Greece’s primary budget surplus before debt service.
Greek deputy prime minister Yannis Dragasakis was due to meet ECB chief Mario Draghi in Frankfurt to urge the central bank to increase a liquidity lifeline for Greek banks and permit them to buy more shortterm treasury bills, easing the government’s immediate funding crunch.
Meanwhile, German finance minister Wolfgang Schaeuble said Tuesday that the issue of whether Germany should pay reparations to Greece for the Nazi occupation during World War II had been settled, while not denying the country’s moral responsibility. Germany insists that the issue is settled, a position reiterated by Mr Schaeuble in the German capital on Tuesday.