Greece is at the top of the agenda at today’s Eurogroup meeting once again. The finance ministers of the eurozone are gathering in Brussels just 24 hours before Greece’s latest major debt repayment.
On May 12 Greece has a €767 million ($US856.6 million, £555.4 million) payment to make to the International Monetary Fund (IMF). It’s the consensus that the country will manage this payment, but it’s not clear how many (if any) it can manage after that.
According to the Telegraph’s Ambrose Evans Pritchard, one minister told him “we have enough money to pay the IMF this week but not enough to get through to the end of the month. We all know that.”
Some reports suggest Greece could last into June or July without the latest €7.2 billion tranche of aid from its creditors, but that depends on how much money it can drain from local government coffers.
Either way, the payments start building up pretty soon, and June’s payments are heavier than May’s:
According to Michala Marcussen at Societe Generale, we might see some progress reported from the Eurogroup, though a deal itself is unlikely:
The chances of a complete deal at Monday’s Eurogroup meeting – which would allow the release of the frozen funds – still appear limited. However, EU leaders are likely to confirm that some (or in the best case significant) progress has recently been made.
That seems to be the line from a lot of analysts — no deal yet, but there has been some progress from previous meetings.
While Rabobank analysts note that media reports are pointing in the opposite direction (emphasis theirs):
There are also reports today that patience with Greece is genuinely coming to an end. Bloomberg quotes figures close to Chancellor Merkel calling for Grexit; the UK Telegraph says that after a nine-hour cabinet meeting on Sunday, the Greek government has resolved to defy its creditors; an anonymous Greek minister quoted in the Telegraph states that Greece can make the EUR750m payment to the IMF tomorrow, but does not have the cash to last to the end of this month; and the WSJ states the IMF is preparing contingency plans for a Greek default.
It’s hard to see where the progress is coming from. The government has a bunch of red line issues — particularly pensions and labour market reforms — which are also prerequisites for a deal as far as other European countries and the International Monetary Fund (IMF) are concerned.
There’s still little sign that Athens is going to be the first to blink here, and a lot of European finance ministers seem happy to take this right down to the wire.
The sidelining of finance minister Yanis Varoufakis might have been enough to calm some other Eurogroup members, but there’s no real sign that the government is happy to make major changes to its current stance — remember that Prime Minister Alexis Tsipras has promised a referendum if the deal he gets is not consistent with his far-left party’s manifesto.
There’s no way of reconciling the reports coming out of the country at the moment with the idea that significant progress is about to be seen. The two sides have pretty irreconcilable positions right now, and one has to give in, or there will be no deal.