Eurozone finance ministers will try to overcome months of differences with the IMF today and unlock sorely needed bailout cash for Greece to avert a fresh crisis. IMF chief Christine Lagarde and the eurozone’s 19 finance ministers meet in Luxembourg with hopes riding high that the talks will secure the release of the latest tranche of Greece’s 86-billion euro (USD 97 billion) bailout agreed in 2015.
“We’ll get there on Thursday, you’ll see,” German Finance Minister Wolfgang Schaeuble, the eurozone’s most influential official, said at a Bloomberg event on Tuesday in Berlin. But Athens has insisted it would veto the deal, furious that the disbursement could come without firm debt relief commitments after delivering on tough reforms.
Greek Prime Minister Alexis Tsipras said his country’s debt needed to be dealt with, saying in an editorial published in French daily Le Monde on Wednesday that the meeting was “essential” for the “future of Europe”. If there is no deal, Tsipras said he will take up the issue with EU leaders at a summit in Brussels next week, a situation that the eurozone ministers will do everything to avoid.
Bitter disagreement between Germany and the International Monetary Fund has held up the payout of a fresh tranche for Athens to meet seven billion euros of debt repayments due in July.
The IMF, which took part in Greece’s two previous bailouts, has long insisted that more debt relief be part of a deal. But Berlin, Greece’s sternest critic, has resisted any fresh commitment to debt relief, saying Athens did not need it and must continue reforms.
In a major breakthrough, the IMF agreed this month to join Greece’s massive bailout while putting off the debt question until a later date. The IMF compromise is a setback for Tsipras, who loses a major backer of deeper debt relief.
The IMF’s compromise is a controversial one, with critics accusing the Washington-based fund of bending its rules to satisfy Berlin. The IMF had insisted repeatedly that Greece’s debt is not sustainable and the country would require significant debt relief from Europe before the fund could approve a new loan programme.
Greece nearly crashed out of the euro in 2015 after a furious fight over the bailout deal, and says its fragile recovery has suffered from the most recent delay. “We are far from finding a solution at the Eurogroup on Thursday, given that Germany has not made any step,” a Greek government source told AFP on Wednesday.
To soften the blow on debt relief, France has asked its eurozone partners to offer Athens a commitment to debt relief linked to Greece’s economic growth. “We are really doing our best to find an agreement,” said French Finance Minister Bruno Le Maire after talks on Monday with his Greek counterpart Euclid Tsakalotos.
“It’s difficult. It’s complicated,” he said before talks with Tsipras. Tsipras in his Le Monde editorial urged his eurozone creditors to accept the French compromise.