Greece will not come to an agreement with creditors before June 30 when the bailout extension expires, European Union officials in Brussels predict.
Negotiations had stalled and recommenced on Saturday in Paris, but they ended without any progress. European partners will not change their stance regarding the reforms required for Greece to come out of the economic crisis and they are not willing to release any aid funds unless the Greek government implements reforms. However, top European officials have recently stated that they don’t want a Grexit.
According to sources in Brussels, a default does not necessarily mean that Greece will be led out of the euro zone. It will lead to political developments, though.
Greece has lost two months out of the four-month bailout extension and is not close to the review that will unlock the release of the last bailout tranche. Meanwhile, state coffers are emptying at an alarming rate.
At the moment, creditors say that Athens must cut 2 to 3 billion euros from state spending and be more specific on revenue sources. Creditors do not accept potential revenues from television channel licensing or from taxing undeclared deposits in foreign banks as measures to be included in the 2015 budget for the simple reason that they are not guaranteed revenues and they are for one time only.
In addition, if the Greek government does not want the zero deficit clause, it should find another way to finance the supplementary pension funds or limit spending otherwise.
According to sources close to the negotiations, Wednesday’s Euroworking Group will bear no fruit while Friday’s Eurogroup in Riga will allocate about 30 minutes to the Greek issue and there will be no development. The most that will happen in the April 24 meeting between euro zone finance ministers will be they will shake a finger at the Greek side and advise them to continue working on the list of reforms, a source said.
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