EU officials express support for Greece as IMF holds ground

The outlook for the resumption of Greece’s bailout negotiations was unclear on Monday as government officials insisted on the need for the International Monetary Fund to revise its “illogical demands” though European Economic Monetary Affairs Commissioner Pierre Moscovici was expected to strike a conciliatory tone during a visit to Athens on Wednesday.

Few officials from either side believe a deal is possible by the February 20 Eurogroup. Senior Finance Ministry officials are said to be pinning their hopes on a possible meeting of eurozone finance ministers in early March. The aim is for the bailout review to be completed before mid-March when the Netherlands has elections.

What remains unclear is whether Tsipras will make concessions after strong criticism of the IMF over the weekend.

European officials have basically backed the Fund’s demand for contingency measures to be legislated up front. It remains unclear whether the government will accept such a demand. Interior Minister Panos Skourletis made it clear that Tsipras faces a dilemma. “At the current phase there is no agreement without political cost for SYRIZA,” he said.

European officials expressed support for Greece amid renewed speculation about Grexit. “We want to keep the eurozone whole, including Greece, and we will support everything that helps Greece,” German Foreign Ministry spokesman Martin Schaefer said. “That’s why we want the aid program to continue to be successful.”

In his talks with German Chancellor Angela Merkel in Berlin, meanwhile, New Democracy leader Kyriakos Mitsotakis said Greece’s position in the eurozone is “non-negotiable.”

As regards the IMF, European Commission Vice President Valdis Dombrovskis said it had “very pessimistic growth and fiscal forecasts as regards Greece.” “Moreover it is not correcting those forecasts based on facts, based on the actual outcomes,” he said.

IMF chief Christine Lagarde said the Fund is doing what it can for Greece but ruled out a “sweet” deal. She added that a reduction in Greece’s debt load could occur without lenders having to take a haircut. In an interview with Reuters, Lagarde said the IMF had limited room for maneuver. “We have been asked to help, but… we cannot cut a special sweet deal for a particular country.”