Time is running out for Greece

A critical week approaches Greece as it prepares to meet Eurogroup creditors in Brussels as IMF deadline draws near

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Athens, on the verge of a default on debt repayments and a possible grexit, will meet with Eurogroup members in Brussels on Monday to discuss a much needed bailout deal, a day before the monumental euro debt repayment to the International Monetary Fund (IMF) is due.

After being locked in talks with international lenders for months, Greece is preparing for another meeting with the so called Brussels group in order to strike a deal to unlock the remaining €7.2 billion which expires in June. However, the European Central Bank (ECB) continues to insists on no deal unless a comprehensive and detailed list of reforms are laid out.

Although officials announced progresses and the Greek Prime Minister Alexis Tsipras anticipates a happy ending with creditors, German Finance Minister Wolfgang Schaeuble deflated hopes for a possible deal on Monday while warning of Greek default.

Germany is one of the main contributors to the European Union (EU) and has been one of the biggest creditors to Greece.

Greek Deputy Foreign Minister Euclid Tsakalotos, who now leads negotiation talks, said that “any delay in achieving a compromise has to do with one and only one reason, and this is the political differences between the government and the institutions.”

Greek officials, members of the EU and the IMF are holding talks in Brussels over the weekend while Tsipras has summoned his governing team for a meeting in Athens on Sunday.

“European institutions, the IMF and Greek authorities are trying to find a solution, but the solution is in the hands of Greek authorities,” said European Commission Vice President Jyrki Katainen.

If Greece cannot gather enough funds to fulfill the international obligation to make a repayment of €770M to the Fund on May 12, and fails to gain assistance, negotiation talks will continue to drag.

Recently, the US tried to persuade Athens to embrace the Western-backed Trans-Adriatic Pipeline (TAP) which they describe as more profitable compared to Russia’s proposal to join the Turkish Stream pipeline, however, Greek Energy Minister Panagiotis Lafazanis reported that Athens is expected to "receive significant financial dividends for the pipeline's operations,” and that the pipeline will bring “extremely important profits to Greece.” According to the Russian Times, Greece is expected to sign a deal with Russia within the next few days.

In addition, Greek Finance Minister Yanis Varoufakis presented a 36-page document titled “Greece’s recovery: A blueprint” to his correspondents and senior officials in Brussels, according to four European Officials.

Adding that it is just a first draft, he described the report as a plan that illustrates “ the recovery and growth of the country in the [post-bailout] era,” “this is a long-term project that goes well beyond the limits of the negotiation that is currently underway in the Brussels Group,” said Varoufakis.

The Greek government anticipated a 0.8 percent growth this year which is well under the 1.4 percent assumed growth rate that was sent to its creditors in March, "however, it's estimated that favorable conditions for the Greek economy will be maintained,” stated the reform plan drafted by Varoufakis.

Conversely, the European Commission cut the debt burdened country’s Gross Domestic Profit (GDP) expectation dramatically for 2015, from 2.5 percent to 0.5 percent due to uncertainties in their policy approach.

The Greek think-tank IOBE also reduced its growth forecast for this year, expecting an economic expansion of 1.0 percent rather than forecasted 2.3 percent in January.

However, the progress of the Brussels meeting will set out a more transparent outlook to the country’s economic performance.

“Despite the difficulties we will face, with the people’s support, we will manage to accomplish a deal,” said Tsipras.

TRTWorld and agencies