European leaders told Greece yesterday to return to the negotiating table for “intensive work” to wrap up a reform agreement before cash runs out, sidestepping Athens’s demand for a comprehensive, long-term solution to its troubles.
With his country risking default in as little as two weeks, Greek Prime Minister Alexis Tsipras flew to Riga to press German Chancellor Angela Merkel and French President Francois Hollande for a political push to break the impasse in technical-level talks with European Union and International Monetary Fund creditors.
The leaders offered help, but told Tsipras to get back to focusing on talks with the so-called “Brussels Group” of European Commission, European Central Bank and IMF lenders – the trio bankrolling Greece since it nearly went bankrupt in 2010.
“It was a very friendly, constructive exchange, but it’s also clear that there must be more work with the three institutions. There is a lot to do,” Merkel told reporters on the sidelines of an EU summit in Riga.
She said France and Germany had offered to help whenever it was needed, but said: “The conclusion needs to be found with the three institutions and there needs to be very, very intensive work.”
Acknowledging Greece’s dire financial state as its cash runs dry, Hollande said the focus should be on a quick deal that allows the reopening of aid so Greece can be sure of making payments to the IMF in early June.
Talks remains deadlocked over pensions, labour reforms, fiscal targets and VAT
“Everyone knows the deadline, because it’ll be around June 6 or 7 that Greece will need liquidity to meet certain repayments,” Hollande said. “That doesn’t mean that other phases cannot be prepared but what interests the Chancellor and I is what responses Greece can make to release the funds which would give Greece the means to pay the amounts it owes in June.”
Greece’s government put a brave face on the outcome of the talks, voicing optimism it could reach a deal in as little as 10 days – before the next IMF payment falls due on June 5.
Tsipras said he was “very optimistic” of soon reaching a “long-term, sustainable and viable solution without the mistakes of the past”. He later held talks with European Commission President Jean-Claude Juncker, who agreed a deal was “feasible” in the coming weeks, a Greek official said.
Since storming to power in January, Tsipras’s leftist-led government has bitterly fought and then struggled through four-months of talks with the EU and IMF on a deal that could release up to €7.2 billion in remaining aid.
The initial acrimony that marked talks with lenders – aghast at the new government’s unabashed determination to end austerity and bailouts keeping Greece afloat – have largely abated. But the talks remain deadlocked over pensions, labour reform, fiscal targets and increases in value-added tax.