Wednesday 7 December 2016

Greek debt deal without IMF is 'unimaginable'

Merkel tries to put best gloss on stalled talks as impasse continues

Erika Sthrom in Athens

Published 13/06/2015 | 02:30

Greek Finance Minister Yanis Varoufakis (R) and his wife Danae Stratou attend a concert outside the Greek state broadcaster ERT in Athens. Photo: AFP/Getty Images
Greek Finance Minister Yanis Varoufakis (R) and his wife Danae Stratou attend a concert outside the Greek state broadcaster ERT in Athens. Photo: AFP/Getty Images
Alexis Tsipras

THE president of the Eurogroup of finance ministers, Jeroen Dijsselbloem, last night said that a deal without the IMF was "unimaginable".

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However, German Chancellor Angela Merkel said yesterday that it's important that talks aimed at unlocking Greece's financial bailout continue but that everyone must be willing to reach a deal.

During a speech in Berlin, Ms Merkel said: "Where there's a will, there's a way, but the will must come from everybody."

She said that's why it's "right that we talk to each other again and again."

Ms Merkel stressed the importance of carrying out reforms in exchange for support.

The German leader and French President Francois Hollande have spoken frequently with Greek Prime Minister Alexis Tsipras lately as Greece's financial problems have become more urgent.

The IMF sent a very dramatic signal to Athens on Thursday by walking out of the Brussels talks. Greek officials have attempted to sound optimistic for a deal by the end of the month, but its creditors have dampened those hopes.

But the European Union has warned Greece in the clearest language to date that its patience is exhausted and the country will be abandoned to its fate unless it accepts creditor demands in short order.

Donald Tusk, the EU's president, said the radical-Left Syriza government must stop spinning out the negotiations and face hard choices before Greece spirals irrevocably into default.

"There is no more time for gambling. The day is coming, I'm afraid, that someone says that the game is over," he said.

The blunt language came a day after the IMF pulled its officials out of the talks, citing a failure to break the deadlock after four months of wrangling.

"There are major differences between us in most key areas. There has been no progress in narrowing these differences," it said.

Mr Tsipras failed to secure any substantive concessions during two days of stormy talks with key power-brokers in Brussels, including Ms Merkel and Mr Hollande.

Ms Merkel tried to put the best gloss on events, insisting that Greece had agreed to work "full steam ahead" to break the impasse. Yet her assurances belie the reality that Syriza and Europe's creditor powers are no closer to a deal as bankruptcy looms. The Greek interior ministry has ordered regional governors and mayors to transfer all cash reserves to the central bank as an emergency measure.

The mounting worry is that the government may not be able to meet its bill for salaries and pensions this month. The economy is sliding deeper into recession and tax revenues are falling short.

Shares in some of Greece's biggest banks have fallen sharply on the Athens Stock Exchange. Stocks in the National Bank of Greece fell by more than 10pc, while Piraeus Bank fell more than 11.5pc.

Greece is seeking to avoid defaulting on a €1.5bn debt repayment to the IMF.

The payment is due by the end of the month.

Shares on the Athens Stock Exchange had soared on Thursday amid renewed optimism about Greece's talks with its creditors.

The index climbed more than 14pc - the best performance in several weeks.

But the IMF's withdrawal has significantly dampened investors' moods.

Irish Independent

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