Finance Minister Euclid Tsakalotos and other top Greek officials on Tuesday continued talks with officials in Brussels aimed at breaking an impasse in bailout negotiations as European officials highlighted the risks of further delays.
One European official noted that further foot-dragging in the talks could have a disastrous impact on the Greek economy and would almost necessitate further economic reforms.
European Monetary and Economic Affairs Commissioner Pierre Moscovici said a swift technical-level deal was not only desirable but “necessary.”
However, hopes remain low for an agreement at Friday’s Eurogroup summit.
Meanwhile Greek government aides indicated that it was German government officials who undermined a nascent deal at last week’s summit, not the International Monetary Fund.
According to one source close to Prime Minister Alexis Tsipras, German officials broached a new issue at last week’s eurozone meeting, calling for creditors to agree on a new way of calculating projections of Greek fiscal forecasts.
To date, representatives of Greece’s European creditors and the IMF have used different methods to calculate the fiscal impact of economic reforms and budget forecasts and the discrepancy.
With an agreement all but in the bag at the end of last week, a German official suddenly broached the issue, calling for a common approach to be forged, the source said.
The official said Berlin was particularly skeptical about creditors coming up with different forecasts for the period after 2019, the year that the current leftist-led coalition will face a challenge in scheduled general elections.
Greek government sources indicated on Tuesday that they regarded the intervention as an attempt to delay the conclusion of the current bailout review.
The mood was rather downbeat in the ranks of the government as regards the prospects for breaking the deadlock.
But, according to sources, Tsipras has been in contact with several European counterparts in a bid to drum up political support for a solution.
European Council President Donald Tusk is due in Athens on Wednesday for an official visit and the progress of Greece’s bailout negotiations is expected to top the agenda of talks with Tsipras.