Greece is caught in a spat between its major creditors. On one side is the International Monetary Fund, which says “significant debt relief” is needed. On the other are the euro zone institutions, insisting on a primary budget surplus of 3.5 percent of gross domestic product and no further relief. Something’s got to give — and it could be Greece’s euro membership.
Two deadlines — one hard, one soft — are looming. The soft deadline is the Feb. 20 meeting of euro region finance minister in Brussels; the hard deadline comes in July, when Greece’s monthly debt repayments increase to about 8 billion euros ($8.5 billion).
With next month’s Dutch election to be followed by French and German votes, it’s clear that the longer the tussle drags on, the less political appetite there’ll be to resolve the situation. But with both sides in fundamental disagreement, it’s hard to see how a compromise can be engineered. The European Commission said on Tuesday that there’s no date set for talks to continue. In short, Greece remains in limbo.
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