Greek Prime Minister Alexis Tsipras is heading to Brussels for a two-day meeting today, along with every other head of government in the eurozone. The most pressing topic of discussion is him, his country and his government.
And it’s not looking positive right now for Athens. Though Europe’s finance ministers and the new Greek government tentatively agreed to extend the country’s bailout in February, things have deteriorated significantly since.
Relations between Germany and Greece are particularly sour: Greek finance minister Yanis Varoufakis stands accused of giving Germany the finger. That’s just the latest in a string of recent tensions between the two countries, and polling suggests most Germans want Greece out of the eurozone.
According to the Wall Street Journal, at the bureaucratic level things aren’t going much more smoothly. Greece’s international lenders (the European Central Bank, IMF and EU) are being provided “with very little information on the government’s finances and its plans for overhauling its economy and public sector,” with one official simply saying that “the Greeks aren’t cooperating.”
Barclays’ Philippe Gudin lays out what’s at stake in the next two days (emphasis added):
Eurogroup President Dijselbloem suggested on Tuesday that the country could have to impose capital controls soon. We believe that significant progress at the EU Summit is very unlikely and that EU leaders will probably put more pressure on Greece to speed up technical talks and reform implementation. The risk of an accident is still very high in our view, which could imply a Greek default and even possibly a Greek exit from the single-currency union, even though it would be neither in the interest of the Greeks nor of the Europeans. However, today’s meeting, although unlikely to bring an immediate solution, could unlock the discussions if there is a clear and coherent message sent by the political masters, and in particular with some support from Greek PM Tsipras. Conversely, it could also accelerate the need for capital controls if it hardens the irreconcilability of Greek and European positions.
And over at Greek consultancy Macropolis, analyst Wolfgang Piccoli says that “Greece’s moment of truth is inexorably approaching“:
SYRIZA is also paying the price for its lack of experience and its limited exposure to the outside world before winning the elections. The comments made by its leaders still largely reflect the modus operandi of a party unable to rise above its past experience in opposition and to adjust to the fact that both domestic and foreign policy require a more nuanced and sophisticated approach. The net result is that Greece has never been so alone during the eurozone crisis. It is difficult to see how the situation could improve in the crucial weeks ahead as Athens and its European partners embark on the fraught discussions over a new package/program that needs to be agreed before the end of June.