Greece: still no sign of a deal

There have been few signs Greece will secure a deal with its creditors to unlock €7bn of rescue package funds by the end of May.

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.

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".

Recommended

Warsaw and Stockholm: the unexpected new threats to the City of London
UK stockmarkets

Warsaw and Stockholm: the unexpected new threats to the City of London

London has seen off challenges from Frankfurt and Paris, but two other booming financial centres are a bigger threat, says Matthew Lynn.
19 Sep 2021
The charts that matter: more pain for goldbugs
Economy

The charts that matter: more pain for goldbugs

Gold investors saw more disappointment this week as the yellow metal took a tumble. Here’s what’s happened to the charts that matter most to the globa…
18 Sep 2021
With the right political will, inflation can be defeated
Inflation

With the right political will, inflation can be defeated

Governments and central banks can easily control inflation, says Merryn Somerset Webb – they just need the will.
17 Sep 2021
Why are energy prices going up so much?
Energy

Why are energy prices going up so much?

UK energy prices are going through the roof, with electricity the most expensive in Europe and gas at its highest for 13 years. Saloni Sardana explain…
16 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
How to stop recurring subscriptions becoming a drain on your money
Personal finance

How to stop recurring subscriptions becoming a drain on your money

Tracking and pruning subscriptions isn’t as easy as it sounds. Here's how to take charge.
14 Sep 2021