Sorting out the Greek debt crisis has engulfed all of Europe and the US.
Warnings, pleas, suggestions, ultimatums…everything is being thrown at the parties involved in the negotiations, but still no deal has been struck, and conflicting reports are making it hard to see exactly how close, or far apart, the two sides are.
One thing is certain, time is quickly running out and an endgame is coming, like it or not.
Delegates at a meeting of Group of Seven finance chiefs in Dresden, Germany, diverged from the main program to push back against Greek claims that an agreement is near and called for stronger efforts to resolve the standoff. The gathering in a former palace brings together Greece’s three creditor institutions as well as Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of his euro-area colleagues.
“At some point, the discussion has to be transformed into something on paper,” French Finance Minister Michel Sapin said in an interview en route to Dresden. “You need a draft.”
While Greece isn’t on the G-7’s official agenda and the group has no mandate to make a decision, the topic has so far dominated discussions on the sidelines. Time is running out for the Mediterranean nation to receive funding ahead of almost 1.6 billion euros ($1.74 billion) in International Monetary Fund payments scheduled for next month, with the first transfer due June 5.
European officials lined up to rebuff Greek claims on Wednesday that the country will start drafting an accord, and that a deal is close with the European Central Bank, European Commission and IMF.
“Negotiations between the three institutions and the Greek government still haven’t come very far,” German Finance Minister Wolfgang Schaeuble said late Wednesday in an interview with ARD television. He is “always a bit surprised” when Greece says an agreement is near, he said.
Schaeuble and Bundesbank President Jens Weidmann are hosting their counterparts from France, Italy, Japan, the U.K., Canada, and the U.S. IMF Managing Director Christine Lagarde and ECB President Mario Draghi are also scheduled to be in town, as is European Union Commissioner Pierre Moscovici.
As technical talks between Greek officials and the creditor teams continue in Brussels, the G-7 gathering gives finance chiefs from the rest of the world an opportunity to urge their European counterparts to find common ground.
At stake is “how to deal with the short-term repayment schedule which is very lumpy and creates real issues for Greece — and then how we put Greece on a sustainable footing,” Canadian Finance Minister Joe Oliver said in an interview.
President Barack Obama’s administration stepped up pressure on officials to work out a compromise.
“Brinkmanship is a dangerous thing, when it only takes one accident” U.S. Treasury Secretary Jacob L. Lew said in London on Wednesday before traveling to Germany. “Everyone has to double down and treat the next deadline as the last deadline.”
Earlier on Wednesday, Lew spoke to Greek Prime Minister Alexis Tsipras for the second time in less than a week, in a sign of deepening global concern over the standoff.
Europe needs “to recognize that there are limits to the degree of austerity that can be imposed and that ultimately problems get solved through growth,” former U.S. Treasury Secretary Lawrence Summers said in a Bloomberg interview in Dresden.
Summers is one of several economists attending the meeting to help finance chiefs explore longer-term economic issues.
Bailout conditions “worked well with all other program countries,” Schaeuble said. “So far, I’ve never heard any idea for how Greece is supposed to make it as a member of the currency union — and it is a member of the currency union — other than by restoring competitiveness.”