Business World

Saturday 21 April 2018

Deja vu all over again with more Belgian waffle

German Finance Minister Wolfgang Schaeuble
German Finance Minister Wolfgang Schaeuble
Colm Kelpie

Colm Kelpie

On his way into yet another round of discussions on Greece yesterday, Wolfgang Schauble was asked what had changed since the last set of talks on achieving a debt deal for Athens.

"The weather is warmer,'' the German finance minister reportedly quipped in German. The comment proves that while the advocate of austerity may have lost his patience with Athens, he hasn't lost his sense of humour. And his analysis is particularly appropriate. It's forever Groundhog Day in Brussels.

As the sun glistened off the glass-fronted facade of the European buildings yesterday, the change in seasons was the only reminder that time is moving on. As Eurozone finance ministers gathered for their routine monthly meeting, Greece was top of the agenda again, and expectations of a deal remained elusive, as ever.

One wasn't expected in advance of the talks. Instead, it was to be another day of noting progress and giving Athens a forceful nudge. Greece is under mounting pressure to reach agreement with lenders to avoid financial chaos, although Greece has made a €750m repayment to the IMF which was due today, easing market fears of a default. Greek negotiators also need to show it has made enough progress on reforms to allow for a deal on liquidity relief for the country, with another IMF payment due in June.

Athens got a four-month extension to its bailout deal in late February, but there are question marks around progress since then with a June deadline for reforms to be implemented.

Prime Minister Alexis Tsipras and his Syriza party swept to power on promises that it would end austerity, renegotiate its bailout and recast its relationship with the EU.

They're losing the battle. Having extended the bailout, Syriza is struggling to perform the remaining pledges. And Mr Tsipras is facing increasing pressure not only from the powers that be in the Eurozone, but from within his own ranks, and from his own voters.

Many Greeks want him to stick to avoiding further pension cuts and labour reforms. It has been speculated that Athens has managed to cobble together money through various means. All the while, the Greek economy suffers.

And patience is running out at European level also. Ministers yesterday noted improvements in process and some progress, but much work remains. But there was a relatively upbeat, though short statement from the Eurogroup last night.

Schauble may have been joking when he noted the weather is getting hotter. But few would argue that the political temperature will hot up further the longer the talks drag on.

Irish Independent

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