• Aug. 17, 2017, 10:25 am

Uncertainty shrouds Greek debt talks after Tsipras tirade

By Jan Strupczewski

BRUSSELS (Reuters) – Uncertainty shrouded Greek debt negotiations on Monday at the start of a crucial week after Prime Minister Alexis Tsipras fired a broadside at international creditors that officials said bore little resemblance to his private talks with EU leaders.

The euro zone has set a deadline of Friday to conclude the slow-moving talks to allow time for institutions and ministers to approve a deal and secure parliamentary backing to disburse frozen aid before Greece’s bailout expires at the end of June.

Athens is due to make a 300 million euro repayment to the International Monetary Fund on Friday amid growing doubts about its ability to meet all this month’s financial obligations.

Officials close to the talks between Greece and the European Commission, the European Central Bank and IMF said no negotiating session was planned in Brussels on Monday and there had been no meeting on Sunday either. They dismissed market rumors of the imminent announcement of a deal.

In a sign of in-fighting in Tsipras’ government as the negotiations near a crunch point, Greece’s nominee to represent it at the IMF was forced to withdraw on Monday following a backlash against her within the ruling leftist Syriza party.

Hard leftists in Syriza objected to the choice of Elena Panaritis, a former Socialist lawmaker and World Bank analyst, who they said had supported past Greek bailout programs.

In an article in the French daily Le Monde which European diplomats said appeared intended to show Greek voters how hard he was fighting, Tsipras accused the lenders of making “absurd proposals” and disregarding Greek democracy.

“The lack of an agreement so far is not due to the supposed intransigent, uncompromising and incomprehensible Greek stance. It is due to the insistence of certain institutional actors on submitting absurd proposals and displaying a total indifference to the recent democratic choice of the Greek people,” he wrote.

The article was posted on Le Monde’s website before the leftist Greek leader held an hour-long telephone conference with German Chancellor Angela Merkel and French President Francois Hollande on Sunday, which a German spokesman said took place in a constructive atmosphere.

Referring to creditors’ demands for further pension cuts and rejection of restoring collective wage bargaining, Tsipras said they amounted to “the complete abolition of democracy in Europe” and the creation of a “technocratic monstrosity”.

Asked about the sharp contrast between the article’s defiant tone and his second teleconference with the EU’s senior leaders in four days, European diplomats said the public show of anger should not be taken too seriously.

“There is a negotiation going on which isn’t easy but is making progress,” said a diplomat familiar with the exchanges. “It’s quite natural that when it comes to the most politically sensitive issues that remain to be settled, some try to speak out politically.”

BRIDGES

German EU Commissioner Guenter Oettinger told Die Welt newspaper there was still a chance of a deal this week, saying Greece had stopped paying suppliers and contractors weeks ago as cash runs out.

The diplomat said Merkel, Hollande and European Commission President Jean-Claude Juncker would discuss the Greek debt talks on the sidelines of a meeting with industrialists in Berlin on Monday evening on the digital economy.

Juncker has been trying to build bridges with Greece on the key outstanding issues of a primary budget surplus and pension and labor market reforms.

Investors shed low-rated euro zone bonds on Monday due to uncertainties about the debt talks and Greece’s ability to make the IMF payment, although two euro zone sources said they expect Athens to pay the instalment.

One euro zone official said it was less likely that Athens would be able to pay a second instalment of 340 million euros on June 12 without a new injection of cash or a delay. It then owes 556 million euros on June 16 and another 340 million on June 19.

(Additional reporting by Lefteris Papadimas and Renee Maltezou in Athens, Elizabeth Pineau in Paris and Andreas Rinke in Berlin; Writing by Paul Taylor; Editing by Hugh Lawson)

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