No deal in Brussels but auditors expected in Athens next week

A meeting in Brussels on Friday between Finance Minister Euclid Tsakalotos and representatives of Greece’s international creditors yielded some progress but, although foreign auditors are expected to return to Athens next week to resume bailout negotiations, European officials indicated that the review might drag into March.

“We made substantial progress today and are close to common ground for the mission to return to Athens in the coming week,” Dutch Finance Minister Jeroen Dijsselbloem, who chairs the eurozone finance ministers’ group, said after the talks in Brussels.

The aim had been for the meeting to lay the groundwork for a conclusion of a stalled bailout review at the next Eurogroup summit on February 20. Greece’s creditors, who had been divided for weeks over the extent to which Greek debt should be eased and further austerity imposed, came to yesterday’s meeting with a united front.

According to sources, they asked Greek authorities to legislate measures worth 2 percent of gross domestic product, or 3.6 billion euros, up front. Although reports have suggested that those measures will be focused on broadening the tax base and on further pension cutbacks, EU officials would not confirm the nature of the austerity being sought.

Prime Minister Alexis Tsipras, who recently insisted that his government would legislate “not one euro more” in austerity than what has already been agreed with creditors as part of the country’s third bailout program, is expected to give a sense of the direction that he plans to take in negotiations in a speech to the central committee of his leftist SYRIZA party this morning.

Although Greece has no major debt repayments due until the summer, it can ill afford to leave the bailout review unresolved as a growing sense of uncertainty and unease has already led Greek savers to get jittery, with bank deposits down by some 1.5 billion euros since the beginning of the year.

Addressing Parliament on Friday during a debate about corruption, Tsipras appeared optimistic that a breakthrough will be achieved by February 20. He appeared to dismiss demands for more austerity, however, saying “for all serious people in Europe, what they are asking from us is a theater of the absurd.”