The eurozone’s 19 oligarchs are getting together in their Brussels kingdom, one day before Greece has to pay a whopping €750 million ($US840 million) debt bill to the vultures at the IMF.
It should surprise no one by this point, that Greece does not have that kind of cash lying around.
For it’s part, Greece wants the EU to pay the IMF bill on its behalf, but without more austerity.
Europe seems to care less about the threat of financial collapse in Athens, ruling out any chance of compromise that could potentially unlock a portion of the money still owed from Greece’s bailout.
“We have made progress, but we are not very close to an agreement,” said the head of the Eurogroup ministers, Dutch Finance Minister Jeroen Dijsselbloem, in an interview at the weekend.
“We need more time,” he said.
Led by Germany, eurozone ministers demand that Greece impose a rigorous regime of reforms, which the leftist government in Athens, in power since January, has so far baulked at adopting.
With no overall deal in sight, officials said Greece is hoping for a “positive statement” on negotiations that will allow for a section of €7.2 billion ($US8.1 billion) in remaining bailout loans to be released.
The symbolic gesture would also help persuade the European Central Bank to keep emergency funds flowing to Greece’s fragile banks at the current pace.
“We want a clear confirmation of the progress that has been made” in the talks, Greece’s Prime Minister Alexis Tsipras told a cabinet meeting yesterday.
No one outside the Greek government knows for sure how long Athens can go without a deal to end Greece’s 240 billion euro bailout, which began in 2010 and expires at the end of June.
Athens faces a harrowing repayment schedule over the coming weeks. In June alone, Greece owes another €1.5 billion to the International Monetary Fund and it owes another €3 billion euros to the ECB in July and August.
According to sources in Athens, the loan repayment due Tuesday to the IMF will be honored on schedule.
Greece has been squeezing funds from the central and local governments to be able to meet its payments, but mayors are beginning to resist.
“Experience elsewhere in the world has shown that a country can suddenly slide into insolvency,” Wolfgang Schaeuble, the powerful German finance minister, warned.
Greek officials went on a frenetic diplomatic offensive last week, with the flamboyant Finance Minister Yanis Varoufakis making stops in Paris, Brussels, Rome and Madrid to drum up support for his beleaguered nation.
Tsipras spoke three times by phone to Europe’s most powerful leader, Germany’s Angela Merkel, and he repeated calls to Jean-Claude Juncker, the wily head of the European Commission.
“After weeks of painful negotiation, if the other side is willing, it will become apparent that … the deal is very close and will be sealed in the coming period,” Euclid Tsakalotos, one of Greece’s main negotiators, said Sunday.
Sitting in for Greece at the Eurogroup will be Varoufakis, whose exuberant style and propensity to lecture has made fellow ministers bristle.
Varoufakis was thought to have been sidelined as negotiator after the last eurozone meeting ended sourly, and officials in Brussels are unanimous that a new team has calmed the waters.
Tsipras, whose SYRIZA party swept to power on an anti-austerity platform, has called for an “honorable compromise,” and the government reportedly plans a number of concessions to win over its creditors.
According to reports, these include a new unified valued added tax (VAT) rate of 16 per cent for several goods and services currently taxed at 13 per cent.
The new VAT rate, along with a restriction on early retirement and an unpopular property tax, would enable the government to raise an additional five to six billion euros.
But since day one of these talks, bargaining has been complicated by conflicting messages from Athens on how much the government is prepared to compromise.