Greece is hoping to secure a deal with its creditors to unlock €7bn of rescue package funds by the end of May.But there were few signs of progress this week. Greece also warned that it is likely to default on €1.6bn of loan repayments to the International Monetary Fund (IMF) due in four separate tranches between 5 June and 19 June. Bookmaker Paddy Power this week was quoting 11/10 on Greece leaving the euro, the shortest odds ever.
What the commentators said
The basic problem, said Larry Elliott in The Guardian, is that "politically, Greece likes the idea of being part of Europe". All the polls so far show that peoplewant to remain in the single currency. But they don't want to accept any more of the economic strictures that come with membership. The problem is that ending austerity and staying in the euro atthe same time "is not an option".Will Prime Minister Alexis Tsipras negotiate "a surrender"? And if so, will he be able to sell it to the Greek people?
Perhaps a way out of this deadlock, suggested Hugo Dixon on breakingviews.com, is another election. Unless Tsipras gets a fresh mandate for a new long-term bailout programme, not just for a stopgap creditors won't trust his promises. "After the last four months of dispiriting talks," they will continue to think that he will just take the money and fail to push through unpopular reforms. If that's the case, eurozone governments won't be able to persuade their parliaments to disburse new money.
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Meanwhile, if Tsipras makes clear to the Greek population that they would have to make compromises if they really want to stay in the euro, he would have a freer hand in negotiations. Moreover, this would give Tsipras a chance to purge the ultra-left rebels within his Syriza party, who are flat out refusing to entertain even the tiniest compromise. "Most scenarios facing Greece are bleak," concluded Dixon. Rerunning the election would hardly be a walk in the park, but "it is one of the few [options] without a deeply unhappy ending".
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.
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