No breakthrough for Greece at ‘constructive’ talks

Talks between Greek prime minister Alexis Tsipras and his French and German counterparts yielded no real breakthrough last night, though all sides pledged to intensify efforts to find a solution to the Greek impasse.

Despite indications earlier in the day that negotiations on Greece would not take place on the fringes of yesterday's EU-Latin America summit, Greek prime minister Alexis Tsipras met with German chancellor Angela Merkel and French president Francois Hollande last night on the summit of EU-Latin American leaders in Brussels.

Speaking as he left the meeting, the Greek prime minister said the talks had been “constructive”.

“We decided to intensify the efforts to bridge the remaining differences and proceed, I believe, to a solution in the coming period,” said Tsipras, “I believe Europe’s political leadership realises that we must offer a viable solution to Greece and the possibility to return safely to growth with social cohesion and with a sustainable debt.”

Both Chancellor Merkel and French president Francois Hollande left the meeting without speaking to reporters, though a German government spokesman said that the meeting had been constructive. “It was agreed unanimously that the talks between the Greek government and the institutions should be pursued with great intensity,” he said in a statement.

The Greek prime minister remained in Brussels overnight and is due to meet European Commission president Jean-Claude Juncker today, having met the Commission chief informally on the first day of the summit. Relations between the Greek government and the European Commission deteriorated last weekend after Mr Juncker criticised Mr Tsipras for rejecting outright the latest creditor proposal in an address to the Greek Parliament last Friday.

The meeting took place as Standard and Poors downgraded Greece’s rating by one notch last night. The rating agency lowered its rating to “CCC’’ from “CCC+’’ with a “negative’’ outlook, stating that it was likely the country will default on its commercial debt within a year if it can’t strike a deal with its creditors. Greece’s decision to defer payment of a €300 million payment due to the IMF last week showed it was giving higher priority to pensions and other domestic spending than making debt payments on time, Standard and Poors said.

Greece faces default at the end of this month if it does not strike a deal with international creditors to unlock bailout money. Focus is now turning to the next eurogroup meeting of euro zone finance ministers scheduled for next Thursday in Luxembourg.

Signs that a possible deal could be achieved before then emerged yesterday from Berlin, amid reports that Germany was privately in favour of providing a staggered aid deal to Greece, despite continuing opposition from many within Angela Merkel’s CDU party towards granting Athens further aid without significant reforms.

Bloomberg reported that Berlin was willing to unlock badly-needed aid if Greece agreed to even one reform demanded by creditors, a position that was at odds with the tough stance taken by Germany publicly. “The goal is, we want to keep Greece in the euro zone,” chancellor Angela Merkel said on arrival in Brussels. “Where there is a will, there is a way.”

As leaders met in Brussels yesterday, the European Central Bank in Frankfurt was said to have increased the level of emergency liquidity assistance (ela) provided to the Greek banking sector. There were reports that the ECB agreed to increase the ela provision to Greece by more than €2 billion, the biggest weekly increase since mid-February, bringing the total emergency cash being provided to Greek banks to more than €83 billion.

Yesterday, Taoiseach Enda Kenny warned that “time was running out” for Greece. “Since the new Government was elected in Greece, at every European Council meeting there have been offers of support, encouragement and assistance from leaders around the table but time is running out here.”

He said that while that support and encouragement “still remains,” it was up to politicians in Greece to be “creative in the way they deal with the situation.”

“Obviously this can’t continue indefinitely... I know that there have been meetings arranged today between the prime minister and some of the principles of Europe and I do hope that a focus can be brought about on this and that a decision is made that will allow Greece to continue to play their part as a serious member of the euro zone. “