Tsipras hints at compromise after Eurogroup impasse

Tsipras hints at compromise after Eurogroup impasse

With its back against the wall after its failure to clinch a deal at Monday’s Eurogroup and in a race against time to unlock fresh bailout loans, the government on Wednesday appeared to distance itself from the road map it has been preaching to get Greece back on the route to recovery.

This subtle change of tune and priorities was apparent on Wednesday in remarks made by Prime Minister Alexis Tsipras, who said the country’s “strategic goal is, after the third bailout ends in August 2018, to be able to borrow money from the markets.”

In order to achieve this aim, he said, Greece must secure a debt deal like the one presented by German Finance Minister Wolfgang Schaeuble on Monday, which stipulated that the International Monetary Fund should join the bailout now, but without having to fund Greece until 2018.

The proposal also suggested that the discussion of debt relief measures should be deferred until after Germany goes to the polls in September.

However, Tsipras’s remarks were seen as a departure from his original narrative in two significant ways.

Firstly, he made the entry to international markets the top priority at the expense of the goal of getting creditors to specify what sort of midterm debt relief measures Greece can expect.

Tsipras used the carrot of debt relief measures to get members of the SYRIZA-led coalition to vote through fresh spending cuts in Parliament last week.

The second point of apparent departure was his apparent willingness to consider the proposal presented by Schaeuble which had been rejected in no uncertain manner just two days ago.

Analysts have linked the change in Tsipras’s stance to growing concern and jitters within the government that it could again fail to clinch a deal at the June 15 Eurogroup.

Failure to secure a deal could lead to the postponement to an unspecified later date of the discussion about debt relief and the IMF’s participation in the Greek program.

This outcome would punch a deep hole in the government’s narrative regarding the recovery of the economy, through Greece’s inclusion in the European Central Bank’s quantitative easing mechanism, which would in turn open the way for Greece to access international markets.

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