Greece wants emergency summit if Malta talks fail

European Council President Donald Tusk (L) and Greek Prime Minister Alexis Tsipras hold a news conference. Athens, 5 April. [European Council]

Greece and its international lenders remained at odds in talks to release fresh bailout loans to Athens today (5 April) as Prime Minister Alexis Tsipras said a deal was needed this week and accused creditors of ‘playing games’ and causing delays.

Talks between Greece, the European Union and International Monetary Fund have stuttered for months due to differences over Greece’s fiscal progress, labor and energy market reforms, rekindling worries of a new crisis in Europe.

Eurozone finance ministers will discuss the state of Greek negotiations on Friday (7 April) at an informal meeting in Malta, but officials said a full deal there was unlikely.

Latest rift in Greek bailout talks dashes hopes for deal in Malta

A new rift between Athens and the International Monetary Fund over pensions and labour reforms has dealt a blow to an initial accord, dashing hopes for a bailout review deal before a meeting of eurozone finance ministers this week.

Tsipras said he would ask for an EU leaders summit if there was no deal this week and accused some creditors of being obstinate.

“The Greek economy is ready to leave the crisis behind it. But despite the impressive fiscal results, some of our creditors appear unrepentant,” Tsipras told a news conference after meeting EU Council President Donald Tusk in Athens.

“This isn’t child’s play. This is the future of a people we are talking about.”

Greece is on its third bailout from eurozone governments but to get money it has to pass regular reviews of reforms it agreed to in return for the financing.

“What we are trying to achieve is to get close enough to a deal so that lenders’ teams of experts may go back to Athens and finalise the numbers,” one official said.

Sceptical

If experts return to Athens, they would still work several more days there to come up with what is called a staff level agreement – a report on Greek reforms that would allow ministers to acknowledge their completion and disburse loans.

The latest problem concerns reforms that Greece has to implement to reach and keep a 3.5% of GDP budget surplus before debt servicing costs over several years starting in 2018.

Institutions representing eurozone governments believe Greece will keep the 3.5% surplus also in 2019, but the International Monetary Fund, which eurozone governments want to join the bailout for credibility reasons, is sceptical.

The biggest debate is caused by the pension reform, which would marginally raise payouts for some on the lowest pensions, but slash the highest pensions by 40%, with an overall average reduction in payouts of some 15%.

Tsipras said Greece had achieved a primary budget surplus of 3.5% of GDP in 2016, outperforming its 0.5% target, so the debate was unnecessary.

Responding to criticism, Tusk said the European Union stood by Greece’s side and was facilitating negotiations.

“The sacrifices of the Greek citizens have been immense. One thing must be clear – no one intends to punish Greece, our goal is only to help Greece,” he said. “I have no doubt that there is no alternative to a positive breakthrough on Friday.”

A spokeswoman for Germany’s finance ministry said the government was watching the “intensive” discussions between Greece and its lenders. “Delays are not good for economic recovery so we are waiting to see what comes out of these talks,” she said.

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