The progress of negotiations between Greece and its creditors in Brussels has created uncertainty as technocrats insist that the Greek government must rush things for the release of further aid while European Union sources say that there will not be a “political solution” to the problem.
The Greek side is trying to avoid reforms that are contrary to its pre-election pledges but creditors insist that all reforms agreed on in the February 20 Eurogroup must be implemented. Cash-strapped Athens is pushing for a political solution on certain issues so that funds can be disbursed sooner.
The creditors’ side says that there will not be a Eurogroup before the end of next week because negotiations are complicated and progress is slow. Technocrats have to evaluate proposed reforms and they frequently ask for specific information or clarifications. Therefore, the Euro Working Group (EWG) cannot replace the work done between creditors and Greek technocrats.
Brussels has its eyes on ISDA (International Swaps and Derivatives Association), the organization that will decide if a late payment to the International Monetary Fund (IMF) is a credit event and if the CDSs (Credit Default Swaps) will be paid or not. If CDSs are activated, the situation will be even more complicated and will have repercussions on the global economy.
However, European Commission sources say that there is no need to talk about the ISDA or CDSs yet, as long as the two sides continue negotiations and Athens provides all data and figures in a timely manner.
“The technocrats are here to reach a solution. I don’t know what will happen on a politicians level,” a European Commission official said, referring to the approval of reforms in the Greek parliament.