Reports over the weekend that Greece came close to not paying the 750 million euros due to the International Monetary Fund on May 12 will increase the political pressure on the government to reach a deal with lenders as soon as possible.
SYRIZA finds itself caught between party members and MPs, who are reluctant to sign up to a deal with lenders that will mean adopting more austerity measures, and Greek society, which is growing increasingly desperate for a deal as cash dries up.
Negotiations between Greece and its lenders were due to resume at the Brussels Group level on Thursday after a lengthy cabinet meeting in Athens on Wednesday night.
A visit by Greek Foreign Minister Nikos Kotzias to Turkey this week has given fresh hope of progress in relations between Athens and Ankara.
Monday’s Eurogroup produced a lukewarm statement on the state of Greece’s negotiations with its lenders that Athens hopes will be enough to avert any decision from the European Central Bank that would further restrict liquidity to local lenders but which is unlikely to suffice for Frankfurt to lift the T-Bill cap for the Greek state and banks.
The Greek government’s multi-pronged approach to energy issues has been in focus over the past few days after the US State Department sent Special Envoy and Coordinator for International Energy Affairs Amos Hochstein to Athens on Friday to convince Athens that it should concentrate its efforts on the Trans Adriatic Pipeline (TAP) and not on extending the planned Turkish Stream pipeline through Greece.
The Greek government will be looking towards Monday’s Eurogroup for some kind of positive indication regarding the state of its negotiations with lenders but expectations for any kind of notable statement are extremely low.
A joint statement by European Commission President Jean-Claude Juncker and Greek Prime Minister Alexis Tsipras on Wednesday may prove a pivotal moment in the new government’s relationship with its creditors but still leaves a lot of work to be done in the next few days.
The Greek government appears confident that a meeting of the European Central Bank’s governing council today will not result in a greater haircut being applied to the collateral provided by Greek banks seeking emergency liquidity (ELA).
The Greek government is due to launch a new effort on Tuesday to overcome its liquidity problems as talks with its lenders still look far from being concluded and have been complicated by the International Monetary Fund reportedly stressing the need for debt relief from the official sector.