European ministers on Friday heaped pressure on Greece to speed up negotiations to unblock critically needed bailout funds and avert a dangerous default, showing frustration after months of bogged down talks.
The eurozone’s 19 finance ministers ended a meeting in Riga without a breakthrough to unlock 7.2 billion euros (US$7.8 billion) in bailout cash, with the threat of a messy exit by Greece from the eurozone still hanging in the balance.
“It was a very critical discussion,” Eurogroup President Jeroen Dijsselbloem said after the talks ended, with eurozone ministers angry at the lack of progress as a hefty payment of 200 million euros to the IMF stands due this coming Friday.
“There remain big, big problems to be solved for Greece,” he said.
Athens is fast running out of money to pay its creditors and carry out everyday government duties, raising the risk of a default as a long series of huge loan repayments to the IMF and the European Central Bank (ECB) approach.
On Friday, Greece’s parliament adopted a controversial decree ordering all public institutions to hand over their cash reserves to the central bank to help Athens pay civil servants’ wages and service its debt.
However, increasingly irate eurozone ministers have refused to release any cash without a comprehensive list of reforms that the hard-left SYRIZA government has so far refused to accept.
Emphasizing the dangerous line Athens is walking, ECB President Mario Draghi again evoked the possibility of pulling back emergency financing to Greece’s crippled banks, a lifeline to the Greek economy.
Greek Minister of Finance Yanis Varoufakis said the talks in Riga were heated, but pointed the finger to mixed messages from his European partners, all while adding that a deal was within reach.
“The cost of not finding an agreement would be enormous,” Varoufakis said.
In a blog posted on Friday, Varoufakis said differences with the eurozone could be resolved.
“The current disagreements with our partners are not unbridgeable,” Varoufakis said, adding a list of potential compromises on some of the thorniest issues, such as pension reforms and privatizations.
With no deal in Riga, expectations now shift to the next Eurogroup talks on May 11 on the eve of another hefty debt repayment by Greece to the IMF.
“Our message is very clear, we must accelerate starting today, always accelerate and intensify the efforts,” European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici said.
However, European officials are increasingly floating the end of June as the true deadline for Greece, when the current 240 billion euro program expires.
“The crucial moment is the end of June. No one believes in prolonging the current program,” French Minister of Finance Michel Sapin said. “The real question is what happens afterwards.”
However, Dijsselbloem said it was too early to look that far.
“It’s very hard to talk about the future if you can’t get through the next four months,” he said.
For now, the idea that Greece will crash out of the eurozone remains the less likely scenario for officials, although the tense talks will increase fears of major problems ahead.
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