They’ve kept the show on the road, for a few more days at least. That’s about as much as can be said with any confidence about the latest efforts to find compromise between the “irresistible force” of Greek democracy and the “immovable object” of the rest of the eurozone.
A meeting of all 19 finance ministers broke up late last night without even a fudged statement papering over the differences. That is most unusual.
It seems that a communique had been sort-of-agreed, but was then vetoed by hardliners back in Athens. Should the current bail-out programme be ‘amended’ as the Greeks are demanding, or just ‘extended’ as the Germans insist? Economic catastrophe has been sparked by less.
Some see all this as proof that a compromise is close, and that by the next meeting of the Eurogroup on Monday all will be sweetness and light.
The pessimists say that if they can’t even agree on a statement about next steps, what chance is there of a deal on the substantive issues? We should find out soon enough whether the glass is half-full or half-empty, because time is short.
Greece is running out of money even faster than had been expected. Ordinary Greeks have decided that paying taxes amid the current uncertainty would be foolish. It’s fair to say that it rarely takes much to encourage Greeks not to pay taxes, but the state budget is short a cool €1 billion in the last month, a fall of fully 20%. Which means that Athens is going to need European help to pay its bills even sooner than had been expected.
And that will be the crunch point. The moment that a Greek Government can’t pay wages and pensions, can’t repay a loan to the IMF (due in March) or the European Central Bank (due in July) is the moment that Euro membership comes into question. No one wants to reach that point, but it seems that no one knows how to avoid it.
Greece was due to get €7bn or so from the eurozone by the end of February, but with conditions attached that the new Greek government can no longer accept.
Tsipras wants to reschedule billions in debt, raise pensions and the minimum wage, scrap privatisations that have already been agreed, but still get the cash. I don’t know what the German is for “dream on, Alexis”, but that’s pretty much been the response from Berlin.
One important footnote is that this is not simply Germany vs Greece, though there are undoubtedly irreconcilable differences between the two.
Spain, Portugal and Ireland are also resolutely against the Tsipras government being given concessions that they were never able to get for their own people, because that would mean electoral disaster for ruling parties back home.
There is quite a gap to be bridged, and dangerously little time in which to bridge it.
Watch a full report on the current situation here: