Prime Minister Alexis Tsipras said Wednesday that a deal with creditors was “close” and government officials said an agreement was being drafted but representatives of the country’s creditors made it quite clear that they do not share such optimism.
In comments after a meeting at the Finance Ministry, Tsipras said a deal with creditors was “close” and that “very soon we will be able to present more details.” He stressed the need for “calm and determination,” noting that Greece would come under additional pressure in the final stretch of negotiations. He also referred to “conflicting views between institutions” and to “countries with different approaches.” Tsipras added that there is “absolutely no risk to salaries and pensions, nor to bank deposits.”
According to sources, Tsipras was advised to make the statement by aides fearing that jitters were creeping back into the markets and could prompt a new wave of deposit outflows. Tsipras chose to make the statement flanked by Finance Minister Yanis Varoufakis to underline the government’s backing for the latter, who has come under fire over his confusing statements about the content of a potential deal.
Earlier in the day, the European Central Bank decided not to raise the ceiling on emergency liquidity to Greece. A Greek government official commented that the Bank of Greece had not requested an increase to emergency liquidity as the current ceiling of 80.2 billion euros is regarded as adequate “following a stabilization of deposit outflows.”
In an interview with Die Zeit on Wednesday, German Finance Minister Wolfgang Schaeuble said it was down to Greece to decide on whether to introduce capital controls. He defended the decision by Greece’s creditors to link loans to further reforms, despite the country’s tightening liquidity problems. “That is the philosophy of the rescue program. The new government is saying: we want to keep the euro but we don’t want the program any more. That doesn’t fit together,” he said.
Earlier, on a stopover in London on his way to a meeting of Group of Seven finance ministers in Dresden, US Treasury Secretary Jack Lew called on Greece’s creditors “show enough flexibility so if the Greeks are prepared to take the kind of steps they need to take, they find a pathway to resolving this without there being an unnecessary crisis."
But Greece’s creditors appeared not to have changed their position, and a series of officials appeared surprised at claims in Athens that a deal was in the cards.
In an interview with ARD television, Schaeuble said he was “surprised about what is said in Athens all the time, namely that we were very close to an agreement.”
“We do not yet have the catalyst that will allow an agreement,” an ECB official told Kathimerini. Sources in Brussels said they had received no new proposal from Athens since Saturday, when officials had noted progress in talks on value-added tax reform and pensions, with labor reforms and fiscal issues still pending.
But in Athens, a government official said a deal was was already being drafted. The agreement was said to foresee low primary surpluses; non-recessionary measures; the reform of VAT rates (though no scenario for 1.8 billion euros in measures); a long-term solution with debt relief; and some restrictions on early retirements. The official pointed to differences between Greece’s creditors and lashed out at the International Monetary Fund, noting that, “if the IMF’s consent was not required, a deal would have been reached by now.”