European ministers heaped pressure on Greece to speed up negotiations to unblock critically needed bailout funds and avert a dangerous default, showing frustration after months of bogged down talks.
The eurozone’s 19 finance ministers ended a meeting in Riga without a breakthrough to unlock 7.2 billion euros ($7.8 billion) in bailout cash, with the threat of a messy exit by Greece from the euro still hanging in the balance.
“It was a very critical discussion,” said Eurogroup chairman Jeroen Dijsselbloem after the talks ended, with eurozone ministers angry at the lack of progress as a hefty payment of 200 million euros to the IMF stands due on May 1.
“There remain big, big problems to be solved for Greece,” he said.
Athens is fast running out of money to pay its creditors and carry out everyday government duties, raising the risk of a default as a long series of huge loan repayments to the International Monetary Fund and the European Central Bank approach.
On Friday, Greece’s parliament adopted a controversial decree ordering all public institutions to hand over their cash reserves to the central bank to help Athens pay civil servants’ wages and service its debt.
But increasingly irate eurozone ministers have refused to release any cash without a comprehensive list of reforms that the hard-left Syriza government has so far refused to accept.
Greece’s Finance Minister Yanis Varoufakis said the talks in Riga were heated but pointed the finger to mixed messages from his European partners, all while adding that a deal was within reach.
“The cost of not finding an agreement would be enormous,” Varoufakis said.
Emphasising the dangerous line Athens is walking, ECB chief Mario Draghi, also at the talks, again evoked the possibility of pulling back emergency financing to Greece’s crippled banks, a lifeline to the Greek economy.
– ‘Not unbridgeable’ –
Greek officials and Athens’ international creditors have been locked in technical discussions over the reforms Greece must adopt in exchange for the funds, with a deadline originally set for the end of the month.
However, ministers said this process was showing its limits and that the negotiations needed a new approach, which some reports said would mean relocating the talks back to Athens.
Varoufakis dismissed the idea, arguing the Greek people would interpret it as a return of the dreaded ‘troika’ of auditors that oversaw the bailout programme before the radical leftists took power.
“The notion that we go back to the troika is simply groundless,” he said.
Greece’s radical-left Prime Minister Alexis Tsipras swept to power in January on a promise to break with austerity demanded by its EU-IMF creditors.
Defying his paymasters, Tsipras pushed welfare laws through parliament last month and has continued to refuse measures agreed by the previous government.
The anti-austerity measures have angered creditors, but in a blog posted on Friday, Varoufakis said differences with the eurozone could be resolved.
“The current disagreements with our partners are not unbridgeable,” Varoufakis said, adding a list of potential compromises on some of the thorniest issues such as pension reforms and privatisations.
– ‘What next?’ –
At an EU summit on Thursday, Tsipras and Chancellor Angela Merkel of economic powerhouse Germany briefly discussed the stand-off, though little emerged from the meeting.
With no deal in Riga, expectations now shift to the next Eurogroup talks on May 11 on the eve of another hefty debt repayment by Greece to the IMF.
“Our message is very clear, we must accelerate starting today, always accelerate and intensify the efforts,” said EU Economic Affairs Commissioner Pierre Moscovici.
However, European officials are increasingly floating the end of June as the true deadline for Greece, when the current 240 billion euro programme expires.
“The crucial moment is the end of June. No one believes in prolonging the current programme,” said French Finance Minister Michel Sapin.
“The real question is what happens afterwards.”
But Dijsselbloem said it was too early to look that far.
“It’s very hard to talk about the future if you can’t get through the next four months,” he said.
For now, the idea that Greece will crash out of the eurozone remains the less likely scenario for officials, though the tense talks will increase fears of major problems ahead.