Gaps between Greece and lenders remain as Eurogroup looms
Finance Minister Yanis Varoufakis is to face his eurozone peers again on Saturday for a critical summit where Greece is being pressed to decide whether to accept the latest proposal by the country’s creditors or face default and a potential exit from the eurozone.
Friday’s Eurogroup, the fifth in a week, is due to begin at 3 p.m. After a difficult week of negotiations, which appeared to lead to convergence on several issues, both sides are returning to the table of talks with tough demands.
Greece rejected on Friday a proposal by creditors for a five-month extension of its bailout accompanied by some 15 billion euros in funding, with a Greek official dismissing the sum as “inadequate” and remarking that the government “does not have a popular mandate, nor the moral right, to sign a new memorandum.”
The Greek delegation and representatives of the creditors, however, appeared to have drawn closer on the conditionality that would underpin the financing of a new program, offering concessions in reforms to the value-added tax and pension systems.
German Chancellor Angela Merkel indicated that the creditors had made their final offer, describing the terms as “extremely generous.” Merkel and French President Francois Hollande talked Prime Minister Alexis Tsipras through the creditors’ proposal yesterday.
But, in comments to reporters shortly before he left Brussels on Friday, Tsipras indicated that creditors were trying to blackmail Greece. “The European Union’s founding principles were democracy, solidarity, equality and mutual respect,” he said. “These principles were not based on blackmail and ultimatums.”
“It is not political blackmail when we repeat day after day that we are very close to this day when the game is over,» European Council President Donald Tusk retorted later, referring to the scheduled expiry of Greece’s bailout on June 30.
Other European officials struck a tougher tone. German Finance Minister Wolfgang Schaeuble said the chances for a bailout deal stand at about “50-50.”
European Commission President Jean-Claude Juncker appeared more upbeat. “There is a real chance to conclude an agreement,” he said, describing Saturday as “a crucial day not only for Greece but for the euro area as a whole. I’m quite optimistic but not overly optimistic.”
“Tomorrow’s meeting is of a decisive character,” Merkel said.
Speaking to Greece’s ANT1 TV from Brussels, Varoufakis sought to appear optimistic despite the differences. “I see no reason why we cannot have a deal,” he said. “Over the past days and weeks the Greek government has been making concessions continuously,” he said. “Unfortunately, every time we make a concession and we get three-quarters of the way, the institutions do the exact opposite, they toughen their stance,” he said.
According to sources, eurozone officials will discuss a possible “plan B” involving the likely imposition of capital controls on Greek banks next week in the event that no agreement is reached.
On his return from Brussels on Friday, Tsipras convened a cabinet meeting to brief ministers on the state of play. Amid the uncertainty, speculation about the possibility of snap elections or a referendum has reignited.
