Fra Guardian:
News that the EU and IMF are now contemplating prolonging the country’s bailout programme by another five months will land with the force of a bombshell in Athens, our correspondent Helena Smith reports.
There are few who will welcome this news. Kicking the can that is the great Greek debt crisis down the road will not only fail to staunch the political uncertainty that has plagued the country, but have potentially devastating effects for the economy.
It will be a major defeat for the government which has pushed for a comprehensive deal that could alleviate, once and for all, the negative consequences of this ongoing nightmare,” the prominent political analyst Aristides Hatdzis told the Guardian. “Now we have another case of ‘extend and pretend’ which has been which has been at the root of the saga for the last five years. It is like a bad soap opera.”
The leftist-led government had wanted a deal that would at least guarantee financing until the end of 2016 – what Euclid Tsakalotos described in an interview for this blog as a “mid-term solution” that would quash scenarios of Grexit, reignite investor interest in Greece and give the economy the time and space to economically recover. “A short-term solution would be the worst of all,” he told me.
The news was quick to send shudders through the financial sector.
“We will rot inside the euro zone,” one banker said requesting anonymity. “Nobody wants this solution, it just prolongs the Greek drama.”
Germany’s Angela Merkel has been giving a press conference in Brussels where Reuters quotes her as saying:
We have taken a step towards Greece… Now it is up to the Greek side to take a similar step.”
German chancellor Angela Merkel has been again emphasising themake-or-break nature of this weekend’s Eurogroup meeting, saying there are no plans to follow it up with a eurozone leaders summit.
Reuters reports Merkel saying she and her French counterpart François Hollande have urged Greek PM Alexis Tsipras to accept the “generous offer” from creditors and that after concessions from their side it is now up to Greece to take a step in the direction of its eurozone partners.
Eurozone sources say differences between Athens and creditors now minimal
It looks like a cash-for-reforms deal could be within grasp – finally. Ian Traynor reports from Brussels:
Terms still to be finalised but eurozone sources say differences are now minimal – that the pension issue is resolved, lots of VAT issues are resolved and that the differences on VAT amount to a risible €107m – peanuts. Creditors are still demanding €400m in defence cuts, while Greece is proposing €200m. Privatisation arrangements on regional airports are also said to be basically agreed.
An EU negotiating source said: “It’s ridiculous to block agreement for so little.” Another eurozone source said Tsipras has to get this through the Greek parliament on Sunday to secure the five-month extension before Tuesday.
