Euro Talks

Greece Stonewalling International Lenders

Juncker Tsipras Reuters
Not so friendly any more. Alexis Tsipras (l) and Jean-Claude Juncker (r).
  • Why it matters

    Why it matters

    Greece needs to persuade lenders to unlock its remaining funding soon to meet its looming debt payments by June 30.

  • Facts


    • Greece presented lenders with its latest proposals on Monday night.
    • The proposals include revised primary surplus targets up to 2017.
    • The country has bundled the €1.6 billion repayments due to the IMF this month to be paid on June 30.
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Greece appears to be losing its last remaining political credibility with Brussels and its dwindling circle of supporters, as it continues its brinkmanship with international creditors.

With each side waiting to see if the other will budge first, there has been little sign of progress even as cash-strapped Greece runs out of time as well as money.

Late Monday night, the government in Athens presented lenders  – the International Monetary Fund, the European Union and European Central Bank  – with yet another list of proposals to try to unlock its bailout funds. But the offer only provoked quick, massive irritation.

While officials are still sifting through the four-page document from Athens, several E.U. diplomats told Handelsblatt that even at first glance some of the figures and demands did not seem acceptable.

The annoyance is all the greater because Athens seems to be reneging on commitments it had already made to make austerity cuts to its budget up to 2017.

In the latest proposal, the Greek government is only offering a primary surplus (without debt servicing) of 0.75 percent this year, 1.75 percent in 2016 and 2.5 percent in 2017, said one E.U. diplomat. That was less than previously agreed.

After meeting with E.U. Commission President Jean-Claude Juncker last week, Mr. Tsipras had agreed to primary surpluses of 1 percent this year, 2 percent in 2016 and 3 percent in 2017.

The fact that this agreement seems to have been reneged upon has caused fury within the European Commission. “Greece is losing the last friend that it had,” a source in Brussels told Handelsblatt.

Greece has been trying to reach a deal with its creditors to unlock €7.2 billion in its remaining bailout fund.

The country is facing a €1.6 billion debt repayment to the IMF by the end of the month, when its current bailout program runs out. If it can’t reach a deal or its current bailout program is not extended, then it will likely default and be forced out of the euro zone.

The negotiations have dragged on for months, since the election of the left-wing Syriza party in January, which pledged to end the punishing austerity imposed on Greece as a condition for its €240 billion in loans since 2010.

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