Today’s meeting of EuroZone finance minsters is likely to end without a deal on unlocking further loans for Greece. The most that might be achieved now looks to be an agreement to send bailout auditors back to Athens next week. In fact there seems to be no big rush to get a deal done
The additional 900 million euros in funding for Greek banks doesn’t really do anything but buy time, but time is exactly what Greece and its EuroZone creditors need as they try to get a bridge loan in place in time for the July 20 deadline for Greece to make a 3.5 billion euro payment to the ECB.
Tonight—actually the morning of July 16 in Athens–the Greek parliament voted to approve the demands required by the country’s creditors as the price for resuming negotiations on a third bailout program
The EuroZone has only two alternatives the International Monetary Fund MF report continues: Either stretch out—reprofile—Greece’s debt over 30 years or provide substantial debt relief above levels considered to date.
Hours after the early Monday morning agreement on an agreement, the plan for a third Greek bailout program and bridge loan had started to come apart. The obstacles could sink the possibility of any deal—if the parties raising a ruckus aren’t willing to compromise.
The EuroZone has forced Greece down this road before and there is no reason to think that tax increases and cuts to government spending will stimulate growth in the Greek economy this time. If the definition of insanity is doing the same thing over and over again and expecting a different result, then this program is insane.
It is hard to tell exactly what is going on in these talks without being in the room to judge the tenor of remarks, but from out in the corridors and from press leaks, it looks like Germany and its hard line allies such as Finland are trying to force a Greek exit.
Greece has made its pitch and now it’s up to the other members of the EuroZone to either strike a deal tomorrow or have EuroZone political leaders start planning for a Greek exit from the euro on at Sunday summit. If there’s no deal or likelihood of a deal by Monday, the European Central Bank has intimated that it would not be able to extend more loans to Greece’s banks.
