Pressing for Greek concessions, Merkel and Hollande keep Tsipras waiting

Greece and its international lenders moved closer to the brink on Wednesday with the leaders of Germany and France holding off on an expected meeting with Prime Minister Alexis Tsipras to press for more concessions from the Greek side.

Athens said it was waiting for the creditors to respond to ideas it put forward on Monday. Euro zone officials said the proposals were inadequate to plug holes in the Greek budget and also dodged key reforms to make the economy more competitive.

Without an agreement to unlock more aid money, Greece risks default.

“The Greek government has submitted its proposal to the institutions, along with two supplementary documents with specific alternatives on the fiscal gap and the sustainability of Greek debt … So far, there has been no comment or response to the Greek representation in Brussels,” a Greek official said in a statement.

Athens is likely to default on a 1.6 billion euro repayment due to the International Monetary Fund at the end of June unless it receives fresh funds from its frozen bailout or the European Central Bank lets it sell more short-term debt to Greek banks.

That will only happen if the two sides can agree in the coming days on a cash-for-reform deal that has been the focus of acrimonious negotiations for the last four months.

A default could lead to the imposition of capital controls and possibly put Greece on a path to becoming the first country to leave the 19-nation single currency area, undermining the euro’s avowed irreversibility.

German Chancellor Angela Merkel and French President Francois Hollande had been due to meet Tsipras on the sidelines of an EU-Latin America summit in Brussels to move the debt talks forward, but a French source said nothing was arranged so far.

“No meeting is planned at this stage – we’ll see what happens when we get there,” the source said.

The European Commission said its chief, Jean-Claude Juncker, who accused Tsipras on Sunday of misrepresenting the creditors’ proposals and misleading his parliament, had no plans as yet to meet the Greek premier either.

“For this final push, the Commission is of the view that the ball is now clearly in the court of the Greek government which needs to follow up on the agreement at the meeting with President Juncker last Wednesday night,” spokesman Margaritis Schinas told a news conference.

An EU official said the Greeks had made no advance since submitting a three-page proposal on Monday viewed as insufficient because it did not address pension reform or labor market measures sought by the creditors.

“If there is no movement, there is no meeting,” the official said.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.