The International Monetary Fund has withdrawn its delegation from negotiations in Brussels aimed at breaking an impasse and unlocking crucial loans, citing significant differences with the Greek side following another round of talks between Prime Minister Alexis Tsipras, German Chancellor Angela Merkel and French President Francois Hollande.
In a press briefing in Washington, IMF spokesman Gerry Rice indicated that a large gap remained to be bridged with Greece but made it clear that the Fund was not quitting the negotiations definitively. “There are major differences between us in most key areas,” he said. “There has been no progress in narrowing these differences recently and thus we are well away from an agreement.” But he added, “We remain engaged.” He also said, “The IMF doesn’t leave the table.”
The key obstacles in the talks are still the issues of pensions and taxation and the matter of funding, with Rice underlining that “all sides” agree that the Greek pension system is not sustainable. He noted that Greek social security funds are subsidized with the equivalent of 10 percent of gross domestic product, compared to around 2.5 percent in other eurozone countries. Rice also emphasized the importance of broadening the tax base and simplifying the value-added tax system to limit tax evasion. He denied that there were differences between Greece’s creditors, noting that the latest proposal to Athens by lenders was a joint one.
It is not only IMF officials that have left Brussels. Representatives of the European Central Bank also left Brussels on Thursday. Both IMF and ECB officials will only return to Brussels if they have convincing reassurances of progress in Greece’s position, sources said.
Negotiations at the Brussels Group level have been virtually suspended for the past two weeks as Greek government officials insist on finding a political solution to the impasse.
But talks late on Wednesday between Tsipras, Merkel and Hollande failed to yield a breakthrough. European Commission President Jean-Claude Juncker, with whom Tsipras met in Brussels on Thursday, told the Greek premier that a solution needs to be thrashed out with the country’s creditors, sources said.
Greek officials nonetheless appeared upbeat. “The Greek delegation, as agreed, is ready to intensify deliberations in order to conclude a deal soon, even in the coming days,” government spokesman Gavriil Sakellaridis said.
Merkel acknowledged Greece’s stated commitment. “At the end of the talks there was absolute unanimity that Greece will work intensively and full steam ahead… in the coming days to solve all remaining issues,” she said.
But European Council President Donald Tusk emphasized that time is running out. “We need decisions, not negotiations now,” he said. “There is no more space for gambling; there is no more time for gambling. The day is coming, I am afraid, that someone says the game is over.” He added, “The Greek government has to be, I think, a little bit more realistic.”
Tusk and other European officials indicated that the next Eurogroup, on June 18, should be decisive.