Greek leader meets eurozone creditors – but as expected, no deal yet / GUARDIAN

Greek leader meets eurozone creditors – but as expected, no deal yet

Alexis Tsipras met European commission chief, Jean-Claude Juncker, to push for 47-page reform programme, with positive results but no breakthrough

Ian Traynor in Brussels

Thursday 4 June 2015 01.51 BST / http://www.theguardian.com/business/2015/jun/03/greece-finance-chief-prepare-confront-eu-creditors-climax-nears

Greek prime minister Alexis Tsipras joined Jean-Claude Juncker for high-stakes negotiations.

Thursday 4 June 2015 01.51 BST

Alexis Tsipras, Greece’s radical prime minister, met with his eurozone creditors in Brussels on Wednesday evening over the terms of his country remaining in the single currency, as the five-year crisis centred on debt and democracy moved towards a climax.

Tsipras joined the president of the European commission, Jean-Claude Juncker, for dinner and a battle of wills over conflicting ideas for resolving Greece’s financial catastrophe, although many believe the best they are likely to agree is a fix to buy more time.

Although the meeting went well, it ended without a deal. However, there were positive expressions from participants afterwards and Jeroen Dijsselbloem, president of the Eurogroup of eurozone finance ministers, said that there was more to come.

“We will continue our talks in a few days,” Dijsselbloem, the Dutch finance minister, told reporters after emerging in the early hours of Thursday morning from the meeting.

Tsipras had gone to argue for acceptance of a 47-page reform programme he handed his creditors this week. Juncker was charged with presenting him with a quite different blueprint, drafted following an emergency summit of national and international leaders in Berlin on Monday.

Tsipras maintained after the meeting that the Greek proposal was the only realistic option. He said that Athens still rejected some of the creditors’ proposals but indicated that a deal was close on some of the issues and that Athens would make a payment due to the IMF on Friday.

The European commission said: “It was a good constructive meeting. Progress was made in understanding each other’s positions on the basis of various proposals. It was agreed they will meet again. Intense work will continue.”

Before the meeting, Tsipras had been confident that Europe’s leadership would “see reason”. “It is more essential than ever for the institutions and the political leadership of Europe to accede to the realism with which the [Greek] government has been moving for the past three months. We have to avoid division,” he said.

But the commission had earlier played down expectations of any quick breakthrough. “No final outcome expected,” said a spokeswoman for Juncker.

In a week of hastily called summits, emergency drafting of positions and demands, and a cacophony of voices from the leading players saying utterly different things, it is not clear whether Tsipras will be able to clinch a deal with his European and International Monetary Fund creditors.

The high-stakes negotiations could collapse through intransigence on both sides or, perhaps more likely, result in a time-buying pact that would resolve little of substance. It would, however, pull Greece back from the brink of insolvency, default and possible ejection from the eurozone.

Following a mini-summit on Monday of German, French, IMF and European Central Bank (ECB) leaders in Berlin, the creditors tabled a stiff set of demands that Greece would need to meet to secure the €7.2bn remaining in bailout funds for now.

Pessimistic that Greece can meet the terms or put its soaring sovereign debt trajectory on a sustainable path, the IMF has been pressing the Europeans to discreetly countenance a restructuring or writedown of Greek debt. It appeared that effort had failed, for now, leaving Tsipras with extremely tough choices – accept the stiff austerity terms and face a different confrontation with rejectionist hardliners in his far-left Syriza movement at home or reject the terms and call Europe’s bluff over allowing a country to fall out of the single currency.

The French president, François Hollande, and the Spanish finance minister, Luis de Guindos, said they were confident an agreement would be reached, if not on Wednesday then before Friday, when Greece is due to repay €300m to the IMF, the first of four payments this month.

Germany’s finance minister, Wolfgang Schäeuble, and Dijsselbloem voiced pessimism that a deal would be struck.

Mario Draghi, president of the ECB, said the priority need was for a strong agreement, criticising what he sees as feeble proposals from the Tsipras government since it came to power in January on a ticket to reverse eurozone-dictated austerity and recast the bailout terms.

Draghi said he would not relax the ECB ceilings allowing Greek banks to provide a lifeline by lending the government money unless the creditors are able to start disbursing the remaining loans, meaning no more mercy from the ECB unless Tsipras accepted the eurozone’s terms.

Both sides appear desperate for a deal but appear unable to make the concessions needed to facilitate the agreement as they have quite different aims and cannot agree on the end, nor in the means to that end.

Tsipras has been calling on the eurozone to respect the anti-austerity mandate he received from the Greek electorate. Schäeuble and Marc Rutte, the Dutch prime minister, accused him of making promises that he could not keep to get himself elected.

The current bailout expires at the end of the month. It will need to be followed by further negotiations on a third rescue package for Greece. Tsipras has been trying for months to roll both packages into one. The Germans and most others insist the terms of the current bailout must be met before a followup deal can be contemplated.

Crucial to the financial arithmetic is the dispute over setting Greece’s primary budget surplus, the positive balance of revenue over spending after debt servicing costs are stripped out.

Tspiras is seeking to minimise the primary surplus to give himself more room for spending. The creditors want to set a higher surplus, entrenching more austerity.

Tsipras’ case was buttressed on Wednesday when the Organisation for Economic Cooperation and Development issued dismal forecast figures for the Greek economy this year. It reported no growth, higher unemployment and a debt level rising further to 180% of gross domestic product.

Before Wednesday evening’s dinner, Tsipras spoke by phone to the German and French leaders. According to French reports, they told him that the eurozone was not presenting an ultimatum and that the proposals remained negotiable.