Athens holds firm as lenders run out of patience

Greece’s creditors appeared to harden their stance against Athens on Wednesday amid signs of virtually no progress in negotiations on reforms amid a growing sense that they have tired of their Greek interlocutors and are preparing for the worst despite their stated hopes of an eventual breakthrough.

High-ranking European officials indicated on Wednesday that Greece has lost the few allies it had left with its apparent reluctance to move forward in negotiations even as the state’s coffers run dry. They also deemed that a failure to achieve some points of convergence before a Eurogroup summit scheduled to take place in Riga on April 24 would put the country on a “dangerous road.”

Some of the fiercest criticism came from German Finance Minister Wolfgang Schaeuble. “No one has a clue how we can reach agreement on an ambitious program,” Schaeuble told the Council on Foreign Relations in New York. He added that the new Greek government had “destroyed” all the economic improvements achieved in recent years. He said a deal was not only unlikely in Riga but also in the coming weeks and suggested that the eurozone could handle a Greek default, even though it would prefer to avoid it, noting that the markets had “priced in” all possible outcomes to the Greek drama and that there is no risk of contagion to other eurozone states.

Schaeuble’s concerns were echoed by European Monetary and Economic Affairs Commissioner Pierre Moscovici and European Commission Vice President Valdis Dombrovskis, who on Wednesday described the negotiations with Greece as “complex and very slow” and stressed that they failed to understand what the Greek side actually wants.

According to sources, negotiations in Brussels might not resume until Saturday as the heads of Greece’s three lenders will be in Washington for the next two days where Finance Minister Yanis Varoufakis is to have a series of important meetings.

As Greece’s cash reserves dwindle, there was no sign that loans are likely to be disbursed soon as reforms must be agreed and voted through Parliament for aid to be approved. “If anyone is under the impression that aid can be released in April, I think they’re wrong,” a spokesman for the German Finance Ministry said.

Greek authorities meanwhile appeared to be sticking to their guns, despite the discouraging messages from abroad. A government source referred to “hyper-conservative circles in Greece and abroad…leaking scenarios of bankruptcy” in an attempt to scare authorities into shifting stance rather than “finally realizing the dead end which their policies lead to.”

State Minister Alekos Flambouraris, a close aide to Prime Minister Alexis Tsipras, said the government is not considering early elections but did not rule out the possibility of calling a referendum if no deal is reached. “When it comes to matters of historic importance, it’s not a bad thing to ask the Greek people,” he said.

One possible temporary solution to ease Greece’s funding woes could involve the activation of a law dating to 1951 which obliges all state bodies to transfer their cash reserves to the Bank of Greece, Kathimerini understands. Such a move, which is said to have been suggested by Alternate Finance Minister Dimitris Mardas, could provide between 2.5 and 3 billion euros in additional reserves that would keep Greece going until mid-May, Kathimerini understands.

As speculation about a possible Greek eurozone exit continues, Germany’s Die Zeit on Wednesday reported that Berlin is drafting a plan that would allow Greece to default while remaining in the euro. The plan would involve the European Central Bank continuing to fund Greece.

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