Greece, Germany and France Held Late Night Talks on Debt

Greek Prime Minister Alexis Tsipras held a new round of late-night talks with the leaders of Germany and France and agreed to intensify negotiations with Athens’ creditors ahead of a looming default at the end of the month.

The latest in a run of sleep-defying meetings in recent weeks was partly political theater, as all involved try to show their commitment to a deal – and avoid any blame for failing to avert a crunch that could unsettle the euro and the world economy. But Tsipras again said he saw a solution at hand.

As ratings agency Standard & Poor’s downgraded Greek bonds deeper into junk status, questioning whether Athens can pay its debts, the leftist leader emerged early on Thursday from talks on the sidelines of a summit in Brussels with Chancellor Angela Merkel and President Francois Hollande to express confidence.

“We decided to intensify the efforts to bridge the remaining differences and proceed, I believe, to a solution in the coming period,” said Tsipras, whose first five months in government have brought Greece to the brink of defaulting on payments to the IMF if it fails to secure new EU funding within three weeks.

Merkel had made it clear before the meeting, however, that it was not her and Hollande with whom he must negotiate but with the three institutions representing sovereign creditors – the European Union, European Central Bank and International Monetary Fund. There was no change in that line afterwards:

“It was agreed unanimously that the talks between the Greek government and the institutions should be pursued with great intensity,” a German government spokesman said in a statement that described a meeting conducted in a constructive atmosphere.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza