11/08 – Greece’s third bailout deal in final stretch

Greek ministers, representatives of European institutions and the International Monetary Fund resumed talks yesterday morning after a marathon session on Sunday. Negotiators are working “day and night” to reach an agreement, said EC spokesperson for Economic and Financial Affairs Annika Breidthardt on Monday, as quoted in L’Echo, Vilaggasdasag and Luxemburger Wort.

Greek officials had said on Sunday that they hoped to conclude negotiations by this Tuesday at the latest in order to be able to pay €3.2 billion back to the ECB by August 20th. Les Echos writes that an emergency Eurogroup meeting could be convened immediately after the Greek Parliament has validated the agreement. Naftemporiki nevertheless highlights that a series of issues remain unresolved, such as regulations for non-performing bank loans, privatisations, the retirement scheme and labour relations. The newspaper also notes that the two sides agreed yesterday on recession forecasts of 2.1%-2.3% and a zero primary surplus for 2015.

Commenting on the talks’ progress, Irish Times journalist Clifford Coonan claims there is now a general acceptance that the deal will be done, which would remove any immediate threat of a Greek exit from the Eurozone. Most media report that Greek officials have said they expect the bailout deal to be approved by Greece’s parliament tomorrow or Thursday and then voted on by the Eurogroup on Friday. La Stampa and German media reveal that according to EU diplomats, the IMF agreed to contribute to the programme, nevertheless claiming that Athens will need a €90 billion loan.

Several media report that time is running out. Le Monde quotes a European source as saying that if the third bailout deal is not passed this week, “the Germans, the Finns and the Dutch will find it very hard to accept the agreement.” Germany yesterday stressed its wish for “quality before speed” in the negotiations, threatening to slow down the process as it pressed for strict conditions to be linked to aid. Germany wants a deal that includes an ambitious budget plan, a credible privatisation strategy and sustainable pension reform, a German Finance Ministry spokesman said.

In an opinion piece in La Tribune, Romaric Godin writes that Berlin has seen in the Greek agreement – and the constant threat of a Grexit – an opportunity to bolster the German-inspired rules governing the euro area. Leif Pagrotsky writing in Dagens Nyheter, is of the same opinion, adding that the crisis has made Germany’s dominance of Europe more apparent. Kathimerini comments that Berlin is threatened with isolation due to its harsh stance. Meanwhile, most German media, as well as some European media report that according to a study conducted by the Halle Institute for Economic Research (IWH), Germany has profited from the Greek crisis by some €100 billion.

Some leader writers comment on the Greek crisis’s consequences in Europe. While Professor Jan-Werner Müller writes in Politiken that “across the eurozone, Europeans feel trapped in a structure that is pitting nation against nation and makes everyone feel bitter and resentful,” Libération‘s Laurent Joffrin considers that the Greek crisis has been a “crash test for false ideas, undeliverable promises and nebulous speeches,” from which no European political force will emerge unscathed.