Brinkmanship over Greece goes on and on

Here we go again. A day or so of optimism that Greece and its creditors might finally strike a deal seems to have petered out by the time euro zone finance ministers gathered last night in Brussels.

Despite international pressure for a refinement of a new Greek funding proposal, there seems to have been little headway since the last ultimatum was issued at the start of the week. “My feeling is that we’re not much further forward from Monday,” said German minister Wolfgang Schäuble (right).

And so it was that yesterday’s meeting broke up after an hour.

The IMF is in the vanguard of the complainants in the creditor camp, taking issue with the preponderance of taxation measures over spending cuts in the latest Greek plan. This prompted a stern rebuke from Greek premier Alexis Tsipras. He tweeted that the “repeated rejection of equivalent measures by certain institutions” had never occurred before – and said such rejections did not feature in the Irish and Portuguese bailouts.

In the background is an intervention at the emergency euro zone summit on Monday by Enda Kenny, who noted that the troika bodies had accepted a series of changes to prescribed policy measures in the Irish rescue programme.

But the weighting in the Irish programme always favoured expenditure cuts over tax hikes. The Tsipras proposal is heavily weighted in favour of tax. The IMF view, however, is informed by the notion that spending cuts are a more efficient form of retrenchment than tax increases. The former can be controlled by central government but the latter cannot, and Greece has habitual problems with tax collection.

As the clock ticks towards the Tuesday deadline for a €1.6 billion repayment to the IMF, the two camps remain far apart.

The brinkmanship goes on and on.