Two interventions by European Central Bank President Mario Draghi at Monday’s Eurogroup touched a nerve with Finance Minister Euclid Tsakalotos, provoking a rare strong response by the Greek official.
That response leads to the conclusion that Tsakalotos considers the ECB chief responsible for the non-disbursement of the 5.7-billion-euro tranche, and to be the face of the hawkish trend among the country’s creditors.
Furthermore, sources in Athens argue that Tsakalotos possibly discerned in Draghi’s words the disputing of the government’s scenario for a so-called “clean exit” by the country from the bailout program and a possible future recommendation by the central banker for recourse to a precautionary line of credit.
Although the fact the tranche was not disbursed did not represent a major crisis, the tension between the two men served to highlight a crack in the solid picture painted last month, with plenty of kind words and positive assessments.
Draghi’s interventions concerned the delays in the expansion of online auctions to the entire country, as well as the yield of the seven-year bond, which has soared since the day it was issued earlier this month. Sources say that at Monday’s Eurogroup Draghi welcomed the progress in the prior actions but observed that the problem with online auctions outside Athens remains, and raised the issue of replacing notaries seen as abstaining.
Tsakalotos interrupted Draghi to say the reason the review has not been wrapped up is due to issues beyond the government’s direct control, referring also to the presidential decree on the development of Elliniko. Ministry sources said some good will would have sufficed for the ECB not to hamper a disbursement decision.
On the bond issue, eurozone sources said Draghi branded the issue of the seven-year paper as “positive,” as it was oversubscribed, but its rising yield points to the vulnerability of the Greek economy. He went on to ask Athens to be more cautious about achieving sustainable market access, to which Tsakalotos responded that the government is not responsible for the markets’ ebbs and flows.