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Greece and Eurozone Send Positive Debt-Deal Signals Greece and Eurozone Send Positive Debt-Deal Signals
(about 4 hours later)
ATHENS — As Prime Minister Alexis Tsipras of Greece visited Brussels on Wednesday to compare his country’s debt-relief plan with one drafted by Greece’s creditors, there were signals from around Europe that the two sides might be edging closer to an agreement. ATHENS — As Prime Minister Alexis Tsipras of Greece visited Brussels on Wednesday to discuss a bailout deal, signs emerged that the two sides might be edging closer to a compromise.
“It is a matter of a few days or even hours from a possible settlement,” President François Hollande of France said at a news briefing at the Organization for Economic Cooperation and Development in Paris. Mr. Hollande had spoken with Mr. Tsipras and Chancellor Angela Merkel of Germany on Wednesday afternoon by telephone in a conversation that Mr. Tsipras later called “constructive.” Greece and its creditors understand the need for a quick solution to provide relief to the debt-burdened country and have agreed, at least in principle, to move toward a deal. The creditors even appeared ready to make a significant concession that would free up more money to flow to the Greek economy.
Earlier, the European Central Bank president, Mario Draghi, said in Frankfurt that the central bank wanted Greece to “stay in the euro,” and called for a “strong agreement” that “creates growth, and which is fiscally sustainable and addresses the remaining sources of financial instability.” “It is a matter of a few days or even hours from a possible settlement,” President François Hollande of France told reporters on Wednesday at the Organization for Economic Cooperation and Development in Paris. Mr. Hollande had earlier spoken by telephone with Mr. Tsipras and Chancellor Angela Merkel of Germany in a conversation that Mr. Tsipras later called “constructive.”
One possible area for compromise, according to a Greek official, was relief on the amount of money Greece would be required to make available for debt payments — the so-called primary surplus — rather than being able to spend it to stimulate the economy. On Wednesday morning, the European Central Bank president, Mario Draghi, said in Frankfurt that the central bank wanted Greece to “stay in the euro.” He called for a “strong agreement” that “creates growth and which is fiscally sustainable and addresses the remaining sources of financial instability.”
Mr. Tsipras was set to meet Wednesday evening in Brussels with Jean-Claude Juncker, the president of the European Commission, to discuss proposals to try to unlock 7.2 billion euros, or about $7.9 billion, of money from Greece’s existing international bailout program. Mr. Tsipras met on Wednesday evening in Brussels with Jean-Claude Juncker, the president of the European Commission, and Jeroen Dijsselbloem, president of the Eurogroup of finance ministers, to discuss proposals to try to unlock 7.2 billion euros, or about $8.1 billion, from Greece’s existing international bailout program.
That program is set to expire at the end of the month, and Greece’s creditors have been unwilling to release the funds unless Athens agrees to a set of revised economic policies meant to put it on a firmer financial footing in the future. Mr. Dijsselbloem left the meeting looking stern, but he later described the meeting as “good.” The commission said in a statement that intense work would continue.
Greece and the creditors — the European Commission, the International Monetary Fund and the European Central Bank — have worked on dueling proposals this week to try to end the stalemate. Mr. Tsipras told reporters that there had been progress on one sticking point, the so-called primary surplus, or the amount of revenue that Greece is required to hold in its coffers after expenses have been paid and before servicing its debt. But he said reaching an overall agreement would take more time.
The Greek official, speaking on condition of anonymity as is the government’s policy, said Wednesday that Mr. Tspiras and the French and German leaders had agreed on the need for a quick solution. The statement also cited an agreement in principle on the key compromise on the economic overhauls. That involves the primary surplus, the amount of revenue that would be required to remain in Greece’s coffers after expenses have been paid and before servicing its debt. Greece’s bailout program is set to expire at the end of the month, and creditors have been unwilling to release the funds unless Athens agrees to a set of revised economic policies meant to put it on a firmer financial footing in the future.
Mr. Tsipras has argued that Greece’s creditors have been forcing Athens to keep its primary surplus amount too high, requiring large sums that should instead have been made available to stimulate the economy, which has slumped back into a recession. And so a compromise on that measure, if it comes, could represent a significant breakthrough in the talks. Although none of the parties were citing specific numbers, Mr. Draghi indicated on Wednesday that a lower primary surplus target might be acceptable. Greece and the creditors — the eurozone countries, the International Monetary Fund and the European Central Bank — have worked on dueling proposals this week to end the stalemate. It remains an open question whether they can bridge their differences and make a deal before the country runs out of money, perhaps within weeks, which could lead to its exit from the eurozone.
For all the brighter signs, however, no final deal appeared likely to be clinched on Wednesday night. For months, Greece’s creditors have taken a hard line, insisting that the country stick to the program. Greece, in turn, has remained defiant, saying the imposed austerity measures are hurting its economy and people.
The European Commission, the executive arm of the European Union, has been a crucial broker between Greece and the eurozone countries to it owes money. While the commission president, Mr. Juncker, was expected to spend considerable time Wednesday night trying to persuade Mr. Tsipras to come to terms, the commission’s chief spokesman, Margaritis Schinas, cautioned beforehand: “This is a first discussion, not a concluding one.” But beneath the customary tough talk, there was a softer subtext on Wednesday.
Mr. Tsipras still faces potential resistance to any debt deal from his own leftist Syriza party. A number of party officials have expressed exasperation over the perception that Mr. Tsipras may be softening his anti-austerity pledges in order to secure an agreement. Some Syriza lawmakers have hinted in recent days that they might break into open dissent if Mr. Tsipras strikes a deal that they consider unacceptable. In one of the strongest signals of a potential compromise, Mr. Draghi said that “social fairness” — a new phrase from him — should be an element in the program that Greece will need to accept. And he indicated a willingness to slightly ease the fiscal targets that Greece has been asked to meet.
Nikos Filis, the spokesman for Syriza members of Parliament, said Wednesday morning that Athens would not make a large loan payment to the International Monetary Fund on Friday unless a deal was reached. “The current downgraded growth perspectives of the Greek economy,” he said, “should be taken into account in determining what the appropriate budget surplus figures should be.” Translated, that means Greece should be given a little slack in its fiscal targets.
“If there is no prospect of a deal by Friday or Monday — I don’t know by when exactly — we will not pay,” he said in an interview on Greek television. “The government will do the best it can to bring to the people an agreement that will break the vicious circle of austerity and recession.” Mr. Tsipras said the discussions had taken place in a “friendly climate,” adding that all sides had agreed to avoid “the type of austerity measures of the past.”
The remarks may have been played mainly for a domestic audience. Earlier in the week, the finance minister, Yanis Varoufakis, said Greece would make good on the €300 million loan repayment due to the I.M.F. on Friday — although he, too, linked the promise of a payment to a debt deal’s being reached. The emerging area of compromise centers on the so-called primary surplus. Mr. Tsipras has argued that Greece’s creditors have been forcing Athens to keep its primary surplus too high. Instead, he has said that much of that money should be made available to stimulate the economy, which has slumped back into a recession.
But the remarks in Athens underscored the fine line that Mr. Tsipras must walk between international compromise and his domestic obligations, as he negotiates a final deal. Under the current bailout terms, Greece is required to maintain a primary surplus of 3 percent of gross domestic product this year. Its government is pushing for less than 1 percent.
As he headed to Brussels on Wednesday, Mr. Tsipras said: “We need unity, we must avoid division. I am confident that the political leadership of Europe will do what needs to be done. It will accede to realism.” A compromise on that measure, if it comes, would represent a significant breakthrough in the talks. Although none of the parties cited specific numbers, Mr. Draghi indicated on Wednesday that a lower primary surplus target might be acceptable.
Mr. Hollande, the French leader, acknowledged in his news briefing that austerity had pushed Greece’s already feeble economy to the brink. But he also indicated that creditors would by no means give Greece additional emergency funding unless Athens took concrete steps to overhaul the economy and mend its tattered finances. The European Commission, the executive arm of the European Union, has been a crucial broker between Greece and the eurozone countries to which it owes money. While Mr. Juncker was expected to spend considerable time on Wednesday night trying to persuade Mr. Tsipras to come to terms, the commission’s chief spokesman, Margaritis Schinas, cautioned, “This is a first discussion, not a concluding one.”
Mr. Tsipras still faces potential resistance to any debt deal from his own leftist Syriza party. A number of party officials have expressed exasperation over the perception that Mr. Tsipras may be softening his anti-austerity pledges to secure an agreement. Some Syriza lawmakers have hinted in recent days that they might break into open dissent if Mr. Tsipras strikes a deal that they consider unacceptable.
Nikos Filis, the spokesman for Syriza members of Parliament, said on Wednesday morning that Athens would not make a large loan payment to the International Monetary Fund on Friday unless a deal was reached.
“If there is no prospect of a deal by Friday or Monday — I don’t know by when exactly — we will not pay,” he said in an interview on Greek television.
The remarks may have been made mainly for a domestic audience. Earlier in the week, the finance minister, Yanis Varoufakis, said Greece would make good on the €300 million loan repayment due to the I.M.F. on Friday — although he, too, linked the promise of payment to reaching a debt deal.
But the statement underscored the fine line that Mr. Tsipras must walk between international compromise and his domestic obligations as he negotiates a final deal.
On Wednesday night, when asked whether Greece would be able make its next payment, Mr. Tsipras said, “Don’t worry about it.”
Mr. Hollande acknowledged in his remarks to reporters that austerity had pushed Greece’s already feeble economy to the brink. But he also indicated that creditors would not give Greece additional emergency funding unless Athens took concrete steps to overhaul the economy and mend its tattered finances.
“To demand too much from Greece will prevent the return of growth,” Mr. Hollande said. “But asking for nothing or not enough would have consequences for the whole eurozone.”“To demand too much from Greece will prevent the return of growth,” Mr. Hollande said. “But asking for nothing or not enough would have consequences for the whole eurozone.”