Greek Prime Minister Alexis Tsipras plans to press fellow European Union leaders to help resolve the deadlock in talks with creditors, inserting his country’s crisis into an EU summit intended to discuss eastern Europe.
Tsipras will raise the standoff in bailout negotiations on the sidelines of talks to be held May 21-22 in Riga, Latvia, according to a Greek government official. Another European official said Tsipras was expected to attend the summit, while saying that Greece is not on the meeting’s agenda. Both officials asked not to be named as the diplomacy is not public.
European policy makers are giving few clues on the state of Greece’s crisis negotiations as investors try to figure out just how much money the country has left in its coffers after surviving another week. The 110-day-long standoff has triggered a liquidity squeeze, pulling the country back into a double-dip recession, amid renewed doubts over its place in the euro area.
“Even if they have a deal before the bailout extension ends at the end of June, we don’t think they’ll get access to the full remaining 7.2 billion [euros] ($8.2 billion) of the current bailout extension,” Stephen Gallo, the European head of currency strategy at Bank of Montreal in London, said in an interview on Bloomberg Television. With the European Central unlikely to “rush in” and buy Greek bonds, the situation in Greece “is not over for a long time,” he said.
The yield on Greek 10-year bonds was up 9 basis points at 10.65 percent as of 12:56 a.m. Athens time on Friday. The yield climbed to as high as 13.93 percent in April, the highest since December 2012, after dropping to as low as 5.52 percent in 2014. Greek securities have declined more than 19 percent in the past year, according to the Bloomberg World Bond Indexes, the worst performer among the 31 sovereign markets tracked by the gauges.
Negotiations in the so-called Brussels Group of Greek and creditor institution representatives will continue over the weekend, with the two sides due to meet again in person next week, a separate EU official said, asking not to be named as the talks are private.
The retirement age, pension cuts, privatizations, fiscal targets for this year and the government’s intention to reinstate collective bargaining restrictions in the labor market are all areas where the two sides remain far apart, a separate official familiar with the matter said this week.
The official added that there’s some convergence in areas including streamlining sales-tax rates and tax administration reform, which is not yet enough for the disbursement of the next tranche of emergency loans. The government needs to move from promising openings toward agreed wording and commitments, the EU official said Thursday.
German Chancellor Angela Merkel is among the EU leaders who have said they will attend next week’s meeting in Riga with representatives of six “eastern partnership” states including Ukraine, Belarus and Georgia.
Greece may meanwhile seek for an additional meeting of euro-area finance ministers to be held by the end of May, Greek government spokesman Gabriel Sakellaridis said on Thursday, as the cash crunch intensifies.
“There has to be an agreement which takes into account the issue of liquidity,” Sakellaridis told reporters in Athens. “Greek society makes the payments due on its debt from its own flesh.” [Bloomberg]