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Our View: Europe’s political will on Greece fading fast

NEGOTIATIONS between Greece and international lenders for a new funding deal have been dragging on since February and have been conducted at every level – at political level among country leaders, at ECOFIN among finance ministers and at technical level involving the representative of ‘institutions’- without success. For the last month we had been hearing, every few days, that the two sides were ‘very close to a deal’, the source usually being the Greek government, but the information invariably proved incorrect.

On Sunday all this wishful thinking on the part of the Greek government came to an end, with the EU hierarchy giving up efforts to strike a deal and referring the matter to Thursday’s meeting of euro zone finance ministers, which is said to be the last chance for a deal. European Commission President Jean-Claude Juncker refused to close door on Greece, his spokesman saying he was “convinced that with stronger reform efforts on the Greek side and political will on all sides, a solution can still be found before the end of the month.”

But the political will of one side appears to be fading. In an article published in the Sunday edition of Bild newspaper, Germany’s Vice Chancellor Sigmar Gabriel – the head of junior coalition partners in the Merkel government, the Social Democrats – indicated that the EU’s patience was wearing thing. “Not only is time running out, but so too is patience across Europe,” he warned. “Everywhere in Europe, the sentiment is growing that enough is enough,” and suggested “the shadow of an exit of Greece from the euro zone takes an ever clearer shape.”

The EU has been reluctant to push Greece out of the euro, for economic and political reasons, and the Tsipras government interpreted this reluctance as a weakness which it has tried to exploit. In the first couple of months of talks it was not even submitting concrete proposals, opting for unrealistic and vague tax collection measures that nobody could take seriously. Having failed to get anywhere with this amateurish approach it changed tack and a little progress was made. It moved closer to the lenders on the thorny issue of the size of the primary budget surplus, without offering viable ways of achieving it, obdurately refusing to cut pensions and wages and raise VAT.

Even if euro zone finance ministers do not take a decision on Thursday, the decision would be taken at the end of the month, by which date Greece must repay €1.6 billion to the IMF or default. Once this happens there will be no turning back for Greece. We hope Prime Minister Alexis Tsipras has made this clear to his Syriza comrades who have opposed a bailout deal, under the illusion that Greece could leave the euro unscathed.

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