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.

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".

Recommended

Plenty more Brexit arguments to be settled yet
Brexit

Plenty more Brexit arguments to be settled yet

Many important negotiations remain to be sealed in our deal with the EU. “No deal is better than a bad deal” is the way to play it, says Matthew Lynn
10 Jan 2021
Will 2021 hold one last deflation scare?
Global Economy

Will 2021 hold one last deflation scare?

With many looking ahead to a world of high inflation, John Stepek looks at a couple of potential scenarios that could give the world one last deflatio…
28 Dec 2020
Will a stronger euro ruin Europe's rally?
European stockmarkets

Will a stronger euro ruin Europe's rally?

International investors have been buying into European stocks, driving the euro higher. But that surge now risks dampening the recovery that started i…
21 Sep 2020
No deal is the best deal for Britain – and the EU too
Brexit

No deal is the best deal for Britain – and the EU too

Europe has a lot to gain from a thriving, independent Britain, says Matthew Lynn.
6 Sep 2020

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Prepare for the end of the epic bubble in US stocks
US stockmarkets

Prepare for the end of the epic bubble in US stocks

US stocks are as expensive as they’ve ever been. How can you prepare your portfolio for a bubble bursting?
18 Jan 2021
The best investment trusts to buy for 2021
Investment trusts

The best investment trusts to buy for 2021

Sectors ranging from emerging markets to student accommodation look poised to do well this year, says David Stevenson, as he picks the best investment…
19 Jan 2021