Cantillon: Greek crisis brings chorus of disapproval

As the European Union embarks on another year expected to be dominated by the refugee crisis and the threat of Brexit, a resurgent Greek crisis is something it could do without.

So it is unsurprising that it was all smiles in Brussels on Thursday as eurogroup finance ministers gathered for their first meeting of the year.

EU economics chief Pierre Moscovici spoke of a "mindset change" in Greece since the acrimonious bailout negotiations last year. While the Greek parliament already pushed through a set of "milestones" before Christmas, the real negotiations begin now.

Greece is entering an important few weeks. Bailout monitors are expected to return to Athens next week to begin the first troika visit. So far, creditors have given a tentative welcome to a draft pension reform plan but have warned that further details are needed. Though the ECB confirmed this week that emergency liquidity assistance provision to the Greek banking sector has dropped significantly, worryingly, European Stability Mechanism (ESM) chief Klaus Regling warned that liquidity conditions could again become tight if the review is not concluded swiftly, noting that Greece faces debt repayments of €4 billion in the first quarter.

Arguably more worrying for Ireland is Greece’s renewed bid for debt relief. The Government’s argument that Ireland has benefitted significantly from debt relief measures already does not wash entirely, given that Greece has also been granted plenty of help on its debt before. While ESM direct recapitalisation may not make sense given the increased value of AIB and Bank of Ireland, this does not account for the money that the Irish State put into the non-pillar bank sector, such as the bailout of Anglo Irish.

Significantly, Dublin was not on the itinerary of Greek finance minister Euclid Tsakalotos’s tour of European capitals this week. Perhaps his guest appearance at the Sinn Féin Árdfheis last March is still too fresh in the minds of the Government. What appears certain is that no serious engagement with Greece’s bid for debt relief will take place in Merrion Street before the general election.