Prime Minister Antonis Samaras arrived in Brussels Wednesday for a European Union leaders’ summit hoping for reassurances that a solution to Greece’s debt sustainability problem would be found when the Eurogroup meets again on Monday.
After 11 hours of talks, a meeting between eurozone ministers and International Monetary Fund Managing Director Christine Lagarde broke up Wednesday morning without concluding either on the disbursement of up to 44 billion euros in loan tranches Athens is expecting next month, nor on how to reduce its runaway debt.
The failure to reach a deal was a blow to Samaras and his government, which had argued that the austerity package passed this month would lead to both issues being resolved.
“Greece did what it had to and what it had committed to,” Samaras said in a statement before he flew to Brussels for the EU leaders’ summit, which begins Thursday. “Our partners now have a duty to meet the responsibilities they have assumed.”
Sources said that it was not clear if Samaras would raise the Greek issue at the summit, which is dedicated to agreeing the EU budget for 2014-2020, but he would have the opportunity for one-on-one discussions with other leaders at the sidelines of the meeting.
Kathimerini understands that the eurozone and the IMF are about 4 percent apart on their predictions regarding where Greek debt will stand after a series of measures to reduce it. The two sides are aiming to agree on a formula that would reduce what Greece owes to its lenders to 124 percent of GDP by 2020 and 108 percent by 2022.
The IMF appears to have backed down on its demands for eurozone countries to accept haircuts on their bilateral loans to Greece but the option of lower interest rates is also problematic as it would require lenders to adjust their national budgets to account for lower revenues and would lead to some countries borrowing at a higher cost than the rate at which they lend to Athens.
Germany, meanwhile, has proposed the option of the European Financial Stability Facility (EFSF) lending 10 billion euros to Greece so it can buy back its government bonds at a reduced rate and bring down its debt. Sources said state assets might be demanded as collateral in order to release this funding.