Plans for Thursday Eurogroup dropped, Tsipras set to ask for special EU summit

Greece and its lenders were unable on Tuesday to reach an agreement on how to line up 3.6 billion euros in contingent austerity measures, leading to plans for an extra meeting of eurozone finance ministers on Thursday being dropped.

A spokesman for Eurogroup President Jeroen Dijsselbloem confirmed on Tuesday night that there would be no meeting this week to rubber-stamp an agreement between Athens and the institutions and conclude the first review of the third Greek bailout program.

“More time needed,” tweeted Michel Reijns. “Meeting of first review, contingency package and debt at later stage,” he added, without suggesting when eurozone finance ministers might meet to discuss Greece.

Prime Minister Alexis Tsipras is expected to call European Council President Donald Tusk Wednesday to ask for an extraordinary EU leaders’ summit to discuss the Greek program as the SYRIZA leader feels that Athens has met its bailout commitments and that the lenders’ side is standing in the way of an agreement.

Greek government sources said earlier that the details of an initial 5.4-billion-euro package of tax hikes and pension cuts had been finalized. However, the standby measures, which total 2 percent of GDP, proved to be a stumbling block.

Athens proposed that the government should commit to adopting corrective measures if fiscal targets are missed but that these interventions should only be specified after Greece’s fiscal data has been ratified by Eurostat.

This proposal is thought to have been rejected by the International Monetary Fund and some eurozone member-states, which want Greece to legislate specific measures now and have them on standby in case they are needed.

Sources said that Finance Minister Euclid Tsakalotos spoke with some of his eurozone counterparts on Tuesday in order to explain the situation to them.

The Greek government believes that German Finance Minister Wolfgang Schaeuble showed understanding for Greece’s position and appeared to support the Greek proposal for a permanent mechanism to reduce spending when the adjustment program is not on track.

Athens is adamant that the IMF’s insistence on specific standby measures being legislated now was the only factor that prevented Greece and the institutions reaching an agreement on Tuesday.

Apart from seeing the automatic mechanism as a route to a swift deal with its creditors, the government also believes that this is the most viable option in political terms.

Tsipras is under pressure from some SYRIZA MPs, particularly the group known as “the 53,” not to legislate any contingent measures. The lawmakers have indicated that they would find it difficult to support any package beyond the 5.4 billion euros agreed as part of the original deal with lenders.

The skeptical deputies, however, are less uncomfortable about the idea of approving a system that will rein in spending automatically if targets are not met.