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Time Is Running Out for Greece Deal

Time Is Running Out for Greece Deal

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Greece still has yet to come to an agreement with its European creditors, as another meeting of eurozone finance ministers concluded without a deal. Reactions from those present indicate that almost no progress has been made, with German Finance Minister Wolfgang Schaeuble and Chancellor Angela Merkel actually claiming Greece has “moved backward” and “we are falling back a bit.” Schaeuble continued, saying that the entire deal depended upon “those responsible in Greece.”

The IMF refused to extend the deadline for debt repayments, which may in effect come sooner than the end of the month. Greece cannot afford payment without further assistance, but the German Bundestag must approve any additional financial aid and the Greek parliament must assent to the negotiated government reforms. Austrian Finance Minister Hans Joerg Schelling explained that Sunday evening would be the last opportunity to come to an agreement before any plan must be submitted to the relevant legislative bodies, but some observers believe that the Greek parliament would need to have already begun consideration of the deal by that time.

Greek leaders have referred to European proposals and negotiating tactics as “blackmail,” and Prime Minister Alexis Tsipras’s latest offers have crossed what he once termed red lines. Pension cuts and Value Added Tax increases are incredibly unpopular in Greece, and will not have an easy path through the Greek parliament.

Even still, Prime Minister Alexis Tsipras and European Council President Donald Tusk remain optimistic that a deal can be reached in time to prevent a Greek exit of the eurozone. Early reports of a European ultimatum have been refuted, which leaves open the possibility for compromise.  As negotiations continue, the European Central Bank is continuing its efforts to stem a Greek bank run. The rate of deposit withdrawals seems to have leveled off to a normal pace after accelerating earlier in the week, a possible sign of optimism.

While talks between Greece and European creditors are obviously an economic issue, NATO Deputy Secretary-General Alexander Vershbow said that the both the treaty organization and the United States are refusing to see it as only economic in nature. Greece has long been of strategic importance in the geopolitical contest between European and Russian influence, and in recent days Greece has made overtures toward Russia. Aware of such developments, other European leaders have joined Vershbow in emphasizing the strategic importance of keeping Greece as a fully integrated member of the European Union.

The Eurogroup will likely meet again Saturday morning, and European Union leaders are also meeting in a Brussels summit. Reaching an agreement to keep Greece in the eurozone is vital for economic and strategic reasons, but time is close to running out.

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