Tsipras to take Greek issue to EU summit if no deal at Eurogroup

Prime Minister Alexis Tsipras appeared determined on Tuesday to seek a solution to the Greek debt issue at a European Union leaders’ summit later this month if Greece doesn’t receive an acceptable concrete proposal at Thursday’s meeting of finance ministers in Luxembourg.

“If this solution is not achieved and we get the same proposal as the last Eurogroup, then my proposal is that we do not accept it…and go to the EU summit,” he told a cabinet meeting.

Tsipras’s decision to raise the issue at the EU summit if there is no progress on Thursday, marks a turnaround from up to just a couple of days ago, when the goverment’s strategy was to clinch a deal at the Eurogroup at all costs.

The premier’s aides reiterated on Tuesday that Tsipras would accept the creation of mechanism like the one outlined by French Finance Minister Bruno Le Maire on Monday, which would link medium-term debt relief to Greece’s growth rates.

This would reportedly be an acceptable compromise for Athens as it could break the deadlock among the country’s international creditors over the country’s debt mountain.

Referring to the proposal by Le Maire, Tsipras told his cabinet on Tuesday that the “key is in accepting a proposal for a mechanism automatically linking medium-term debt measures with growth, bridging differences between institutions.” This compromise, he added, would make way for positive assessments about the debt’s sustainability.

Thursday’s Eurogroup is set to discuss the progress of reforms, ways to reduce debt and whether the International Monetary Fund will participate financially in the Greek bailout.

However, any expectations that there will be a breakthrough were dampened on Tuesday after a senior European official said he is confident there will be an agreement but this would fall short of Greek expectations.

According to the official, the most Athens can expect is the release of a fresh bailout tranche, an agreement “in principle” that the IMF will join the Greek program and a clarification of what sort of debt relief measures Greece should expect.

But these measures, according to reports, are not expected to differ from the ones at the previous Eurogroup, which Greece rejected.

Moreover, an agreement like the one described by the European official will not pave the way for Greece to join the European Central Bank’s quantitative easing mechanism – a key aim of the leftist-led coalition.

The main obstacle to a comprehensive agreement is the disagreement between European institutions and the IMF with regard to the sustainability of the Greek debt. And according to the European official, “we’re not there yet.”

Meanwhile, German Finance Wolfgang Schaeuble had words of praise for Greece’s Finance Minister Euclid Tsakalotos at a conference organized by Bloomberg in Berlin on Tuesday.

The German minister, who said he expects a compromise solution for Greece on Thursday, said that Tsakalotos is an “exceptional” minister but he did not enjoy enough of Tsipras’s confidence.