Are we now closer to Grexit? Tonight’s talks between eurozone finance ministers broke up after a few hours with Greece slamming the draft statement prepared by the group as ‘unacceptable’ and ‘unreasonable’. That statement was leaked by the Greek camp while the talks were happening, which can’t have helped the atmosphere in the room. The talks broke up acrimoniously.
Finance ministers have told Athens it has until Friday to agree to maintain the current bailout under the troika, but Varoufakis said in a press conference this evening that ‘we are going to meet halfway during the next couple of days. Europe will do the usual trick, it will pull a good agreement, an honourable agreement, out of what appears to be an impasse’. Is he just bluffing, or is Greece serious?
The Eurogroup is trying to send a message to Athens that they are prepared to cut it loose, which Syriza has always assumed ministers would dare let happen.
Jennifer McKeown at Capital Economics warns that if the European Central Bank ‘considers the talks to have stalled, there is a risk that it will suspend emergency liquidity assistance, perhaps leaving Greece with no choice by to exit the eurozone. And if nothing else, the difficulties of reaching an agreement even to meet Greece’s immediate needs highlight just how difficult it will be to broker a deal on Greece’s debt sustainability that would ensure its eurozone membership in the longer term.’ In other words, even if everything sorts itself out this week and Europe does do what Varoufakis calls ‘the usual trick’, Greece’s future inside the eurozone looks ever more uncertain.
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