Greece: deal or no deal?

Hopes for a last-minute deal for Greece are receding after a meeting of finance ministers failed to make headway.


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.

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.