Greece is back at the cliff edge

If Greece can’t secure aid by mid-April, economists reckon it may crash out of the eurozone.

Greece's prime minister, Alexis Tsipras, the leader of the anti-austerity Syriza party, met European Union (EU) leaders this week in an effort to unlock vital payments to stave off national bankruptcy.

Greece has been raiding the reserves of its public health service and the Athens metro to service debts and stay afloat. But if it can't secure aid by mid-April, economists reckon it will run out of cash and may crash out of the eurozone as a result.

On 20 February EU policymakers agreed to extend Greece's bailout programme until June in return for a comprehensive list of reforms designed to boost long-term growth. Greece's first draft of this list was widely dismissed as inadequate, and it has promised to produce another by Monday 30 March.

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What the commentators said

It doesn't help, added The Economist, that instead of working hard on a deal, the Greeks have preferred "lobbing incendiary political jibes". The defence minister threatened to flood Europewith migrants, including jihadists.

The justice minister demanded $170bn in war reparations. And Tsipras brought forward a meeting with Russia's Vladimir Putin. The "crude" message was that Putin "might be only too happy to help a fellow Orthodox country that dislikes sanctions on Russia". If Greece doesn't stop squandering opportunities, it may find that its chances have run out.

European leaders and investors are increasingly convinced that a "Grexit", however disastrous for Greece, wouldn't trigger a wider crisis, said The Wall Street Journal: bond yields have stayed low in other peripheral states. "Europe is growing bored with Greece's economic tragedy and especially its political farce." Germany certainly won't compromise, said The Daily Telegraph's Jeremy Warner.

Tsipras will have no option but to "buckle under" if he wants to stay in the euro. Having plunged Greece back into turmoil just as it showed signs of stabilising, Syriza is now also likely to secure far less debt relief than a more conciliatory approach would have produced. We are back where we were before Syriza's election in January "only with Greece another couple of rungs down the ladder of economic misery".

Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.