The recent talks between Greece and its creditors have not brought both sides any closer to an agreement, claims Simon Nixon in an article for the Wall Street Journal. In his article, where he cites an unnamed official who is close to the negotiations, the author argues that although Greece may remain in the Eurozone, that is not the main scenario examined by many policy-makers, who fear that the situation will get worse before improving.
No one expects a deal will be reached to unlock Greek bailout funding at the upcoming Eurogroup scheduled in Latvia on Friday, which was the original deadline for a deal. The deadline has now been extended to the 11th of May. According to the official cited by the author, literally nothing has been achieved over the past three months of negotiations between the two sides. The author explains that even if all of the Greek government’s proposals are taken into account, then the creditors believe that the budget surplus will turn into a 10-15% deficit and the debt would rise far above the 120% GDP threshold, which was expected for 2022.
Nixon further notes that Greece’s Eurozone partners will not provide any further funding, unless Athens can reach an agreement that satisfies the IMF. This would require the deal to ensure that the Greek debt is sustainable and that there is a midterm financing plan, in order to convince the European partners.
