Greece: deal or no deal?

15-6-25-Stubb-634 — Finnish finance minister Alexander Stubb is losing patience

As European finance ministers gathered for their latest emergency summit this week, Finland's Alexander Stubb reportedly complained they were all wasting air miles over Greece's negotiations. Sure enough, by the time MoneyWeek went to press, hope for a last-minute deal was receding again.

Greece's latest proposals, presented on Monday, were deemed insufficient by creditors, while Greece rejected their counter offers. Greece needs a deal, and approval for it from both the Athens and Berlin parliaments, before the current bailout expires next Tuesday. Greece would also be in default on an International Monetary Fund payment after that day.

What the commentators said

On pensions, where Greece refuses to contemplate cuts in benefits, it at least suggested raising the retirement age and contributions. Still, creditors continued to insist on cutting pension benefits and want a tax on businesses reduced.

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Early this week we saw "an improvement on mutual hostility", as The Guardian's Nils Pratley put it, but not a great one. In any case, with the focus on securing the last tranche of rescue package aid, people are forgetting the wider context. Greece's public debt is still a ridiculous 180% of GDP. For Greece to have any hope of getting its debt under long-term control, analysts reckon up to half needs to be written off.

But that's not on the table, said Pratley and neither is nibbling away at it by postponing repayment dates and tweaking interest rates. So the Greek crisis is still miles from being resolved. Indeed, it is barely being managed.