Greece’s hopes of staying in the eurozone appeared to be dwindling ahead of an EU summit in Brussels today, with Greek Prime Minister Alexis Tsipras lashing out at his country’s creditors, and attitudes hardening amongst the rest of the EU.
Mr Tsipras raised the stakes as he arrived in Brussels yesterday for talks with Greece’s creditors – the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – denouncing their “strange stance” over his reform plans.
“This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed,” he tweeted.
However, his defiance ahead of the crunch summit only served to underline how far apart the two sides were over the details of a potential new bailout deal.
An emergency summit of Eurogroup leaders in Brussels on Monday brought renewed optimism about a deal, as Greece offered more cuts to pensions and higher taxes. But in the two days since, Mr Tsipras has been accused of backtracking on his pledges.
The creditors say they want to wrap up a deal releasing further loans before Tuesday night, the deadline for Athens to repay a €1.6bn debt to the IMF or risk default. But they say they have been frustrated by the Greek government’s failure to produce meaningful reforms in exchange for the loans.
Mr Tsipras insisted Greece’s planned reforms were being treated unfairly compared with those of other troubled euro members.
��The repeated rejection of equivalent measures by certain institutions never occurred before – neither in Ireland nor Portugal,” he tweeted.
Yet officials in Brussels warned that the Greek proposals failed to address their key demands to cut government spending. IMF head Christine Lagarde, who joined the meeting in Brussels with Mr Tsipras, was said to have been particularly scathing about the Greek proposals, saying they relied too heavily on tax hikes, and did not go far enough in reducing government bureaucracy.
The two sides were at an impasse yesterday, with a feeling among the Greeks that they have made enough concessions already. Whatever deal Mr Tsipras comes back with at this point, it will be a hard sell to his own MPs and coalition partners.
Yesterday. Greece’s right-wing junior coalition partner said the creditors’ counter-proposal could force the country to head to the polls.
“We are fighting to stay in Europe. But if we’re presented with a very onerous agreement, like the counterproposals of the creditors, then we’ll be forced to resort to the will of the people again,” Greek MP Marina Chrysoveloni said.
“The people have given us a very specific mandate, so if what we’re presented with isn’t compatible with the mandate the people gave us, then we’ll have to resort to elections again.” (© Independent News Service)
Never has so much been written over such a long period of time about such a small a country. And a great deal of what has been written on Greece is based as much on the prejudices of the authors as it is on a balanced assessment of the many factors at play.
Greece will default on its €324bn sovereign debt for a third time. What's at stake this week in Brussels is whether this is done by agreement or disagreement. Greece's first bailout - when only private investors got burned - left its debt/GDP ratio at 120pc. After five years of austerity displacing one-fifth of its economy, it hovers unsustainably at 180pc. You can't solve debt distress by piling on more indebtedness. Rolling over loans without write-offs only postpones the inevitable ultimate settlement, while putting Greece deeper in the mire.