After talks that lasted well into the night, the leaders of Germany and France, along with Greece's international creditors, have agreed to work with “real intensity” to reach a deal with Athens in the coming days after months of stalled talks.
This meeting in Berlin was meant to be focused on boosting Europe’s economy through more investment. But it’s turned into a late-night session on Greece, once Christine Lagarde and Mario Draghi arrived unexpectedly and joined the meeting in an effort to come up with “a final proposal” for Athens.
The meeting began in Berlin at 9.30pm local time and lasted until around midnight with the leaders discussing the state of negotiations with Athens. Reuters quoted a German government officials as saying: “They agreed that work must continue with real intensity.” He added: “The participants in the talks were in close contact in recent days and want this to remain the case in the coming days both among themselves and of course with the Greek government.”
The eurozone has set a deadline of Friday to conclude the slow-moving talks to allow time for institutions and ministers to approve a deal and secure parliamentary backing to disburse frozen aid before Greece's bailout expires at the end of June.
Creditor institutions were working on a common proposal that would be presented to Greece in the next few days. The joint position may be communicated to Greek Prime Minister Alexis Tsipras by European political leaders. According to the Financial Times:
“One official said there were no new concessions to Athens in the commission paper. Rather, it was intended to spell out the core principles creditors need to conclude a deal. Yanis Varoufakis, the Greek finance minister, has long argued that Athens accepts 70% of the existing bailout program, and creditors are hoping any compromise reached in Berlin could serve as the 70% Mr Varoufakis and Mr Tsipras can accept.
Officials cautioned that the final creditor position may need to be fleshed out in the coming days, but their intention would be to present it to Athens this week”.
The eurozone has set a Friday deadline to conclude the slow-moving talks. This will allow time for institutions and ministers to approve a deal and secure parliamentary backing to disburse frozen aid before Greece's bailout expires at the end of June.
According to "Die Welt," German EU Commissioner Günther Oettinger also said that there was still a chance of a deal this week. He noted that Greece had stopped paying suppliers and contractors weeks ago as cash began to run out.
Athens is due to make a 300-million-euro ($327.93 million) repayment to the IMF on Friday. While Greece says it can make the payment, it’s the smallest of four totaling almost 1.6 billion euros this month, doubts are growing about its ability to meet all of this month's financial obligations.
Both sides remain far apart on key sticking points of the bailout terms, with the eurozone and the IMF insisting on liberalizing pledges on labor markets, collective wage bargaining, pension systems and privatization from the Greeks in return for releasing a final €7.2bn in bailout funds that would tide Greece over for most of the summer The Guardian reports. It would then pave the way for further negotiations on a third rescue package for Greece, which might involve a write-down of the country’s unsustainable debt.
(AFP, DW, Reuters, Guardian, WSJ, FT)