Finance Minister Yanis Varoufakis is not expected to make much progress at meetings with eurozone ministers in Riga, Latvia, on Thursday ahead of the Eurogroup meeting on Friday. Sources from Greece’s international creditors estimate that hopes for an agreement will be transfered to the next Eurogroup meeting on May 11.
Meanwhile, Greek PM Alexis Tsipras was in Brussels on Thursday for an extraordinary EU meeting convened to focus on the growing problem of migrant-laden vessels in the Mediterranean heading for European shores — often with disastrous results for the migrants themselves.
On its part, Berlin believes that the final agreement to be accompanied with a release of funding benchmarked for Greece is unlikely to come until the end of June.
The European Central Bank (ECB) threw Greece a lifeline on Wednesday by approving an increase of 1.5 bln euros for Greek banks from the European Liquidity Assistance (ELA) facility, raising the amount the Greek central bank can lend its banks to €75.5 billion from €74 billion the previous week. Under the ECB’s ELA facility, the Greek bank lends money to its country’s financial institutions but these loans carry a higher interest rate than standard ECB loans and the credit risk stays with Greece.
The climate in Paris on Tuesday and Wednesday was heavy with talks being completed without effective results for the Greek negotiating team. Fiscal Policy General Secretary Nikolaos Theoharakis, head of the Greek delegation negotiating with the Brussels Group in Paris, told private MEGA TV that the gap in negotiating techniques on calculations needs to be bridged ahead of the political chasm before progress can be made.
The greatest thorns in negotiations are social security and labor issues with the International Monetary Fund, in particular, pushing for a reduction to the minimum pension and minimum wage. It is still up in the air if a “bad bank” to absorb “bad loans” will be created according to the Radical Left Coalition (SYRIZA) government’s wishes or if 10 bln euros from the EFSF will be used for a new capitalization of Greek banks.
