German Chancellor Angela Merkel said that greater efforts are needed to unlock bailout funds for Greece after late-night negotiations with Greek Prime Minister Alexis Tsipras failed to yield any sign of a breakthrough.
With time running out for a deal to free up the remaining 7.2 billion-euro ($8 billion) tranche of aid, Merkel’s discussions in Latvia with Tsipras and French President Francois Hollande broke up in the early hours of Friday with an agreement only to keep talking. Tsipras talked of a resolution “soon,” whereas Merkel said there’s “a whole lot to do.”
“It was a very friendly, constructive discussion,” the chancellor told reporters on Friday as she arrived for the second day of a two-day European Union summit in the Latvian capital, Riga. “But it was very clear that further work has to be done with the three institutions.”
A short statement released separately by the French and German governments after more than two hours of talks with Tsipras was devoid of earlier optimism expressed by Hollande at paving the way for an accord as soon as the end of the month. In its place, the governments of the two biggest euro-area economies talked of agreement “to stay in close contact.”
“I am optimistic we can soon reach a long term sustainable and viable solution without the mistakes of the past — and Greece will soon come back with cohesion and growth,” Tsipras told reporters in Riga, where he is due to meet later on Friday with EU Commission President Jean-Claude Juncker.
A government official, in a debriefing after the talks broke up about 1 a.m., signaled Greek frustration by saying that a main obstacle is that the International Monetary Fund needs to be on board. “Open issues” remain with creditors, including pensions, sales-tax rates and targets for a primary budget surplus, the official told reporters.
The French and German statements lacked Hollande’s upbeat tone as he arrived in Riga, when he had opened the prospect of striking a political deal that could help lead to an accord by finance ministers at the end of May or early June. Without an agreement, Greece risks a default that would put in question its future in the 19-nation euro region.
Absent too from the final statements was any reference to an extraordinary finance ministers’ meeting on Greece. Hollande had said that the discussion with Tsipras would “help prepare for the expected deadline, especially the eurogroup” meeting of euro-area finance ministers “at the end of May or in early June.” That suggested a special meeting since the next regular gathering isn’t due until June 18.
The meeting marked another rejection by Merkel of the latest Tsipras attempt to go around finance ministers to strike a political deal on Greece at the level of government leaders, highlighting German insistence that Greece’s budget numbers must add up before aid can be unlocked.
France and Germany offered to provide assistance to Greece and Tsipras whenever questions come up, Merkel said. “But the accord must be reached with the three institutions and very, very intensive work has to be done.”