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23/06 – Greece: even without an agreement yet, sighs of relief prevail

Many front pages and newspapers’ editorials are as expected dedicated to yesterday’s Eurogroup meeting on Greece. The front page of the INYT reports that Greece and its international creditors seemed, after an 11-hour meeting, to be edging nearer an agreement in their months of debt negotiations, after Athens submitted new proposals that made a significant concession and would raise money through new taxes and cut costs by fine-tuning the nation’s pension system.

Many speak of a “step in the right direction”, or of “a good basis for an agreement”. The currency union’s finance ministers said that more work was needed to ensure Greece’s figures were in line with the creditors’ demands, but that talks would continue with the hope of reaching an agreement later this week, as ministers are to reconvene on Thursday. The INYT as well as many others cites EC President Jean-Claude Juncker as having said that he was actually aiming for a deal with Greece by the end of the week.

Many editorials, including Diário Económico and El País speak of “sighs of relief” after the meeting. Libérationcomments that yesterday’s summit “did not turn out to be the “last-chance” meeting announced by some”, but a “frank political debate between [EU] leaders,” as European Council spokesperson Preben Aaman put it. Europe 1’s Isabelle Ory speaks of “significant breakthroughs,” as “the Greek proposals are serious, probably for the first time since Syriza took office.France 3’s Pascal Verdeau adds that there was “no political momentum” for a deal yesterday, yet the prevailing feeling was that Greek PM Alexis Tsipras was “finally shouldering his responsibilities”.

In Libération’s editorial, Laurent Joffrin writes that the recent flourishing of Greek default scenarios was of “pedagogical use”: each side became convinced that a good break would cost a lot more than a bad compromise. Efforts in Europe, or misery outside of it: it’s not a great choice, but there isn’t any other, he adds. Economic Analysis Council (CAE) Delegated President Agnès Benassy-Quéré also says in an interview with Le Monde that the fact the negotiations seemed to lead towards a Grexit when neither of the parts would like that was appalling. She argues that a Grexit would weaken the euro area and would not eliminate the problem in Greece; on the contrary, it would have major social and humanitarian consequences and would mean the end of the European integration, since we lack the institutions to support it.

Like Ms Benassy-Quéré, many see the Greek issue through the prism of European integration. FAZ’s Nikolas Busse for instance argues that the Greek matter is “much more than simply a decision about a country with a small economy,” as “the European integration is based on the fundamental idea that political and economic conflicts are to be solved through compromise”. Although a Grexit might not have significant impact on the financial markets, and might even be a “healthful shock” for the Greek society, it would be a “tough mortgage” for the EU, as it would be the victory of disunion instead of compromise, of shared damage instead of shared benefit, he argues.

In the Washington Post, Former US Treasury Secretary Lawrence Summers adds that “the IMF needs to recognise that this is now not about the numbers. It is about the high politics of Europe.” Many actually relate the upcoming agreement with the release of the Five European Presidents’ report on strengthening the EMU, which stipulates that “the euro is not only a currency, it is an economic and political project” which requires “solidarity in times of crisis” and to “respect the rules defined by mutual agreement”.

Diário Económico’s editorial notes the irony of having the report to complete the EMU declare the success and stability of the single currency on the same day that European leaders met twice to debate Greece’s crisis, while a WSJE editorial speaks of an “exquisite timing.” Many are also more impervious about the deal to come. Joergen Oerstroem Moeller for instance predicts in The Huffington Post that “Greece will stay in the euro and in the EU, but it will never again be a genuine member speaking with the authority, conviction, and strength radiating ambitions, policies, and policy instruments analogous with other member nations.”

Forbes.com meanwhile features a comment piece by Bill Conerly who says that the likely result is a compromise that “enables Greece to ignore structural reforms and delay debt repayment, while allowing core European leaders to save face with their voters.” Il Sole 24 Ore’s Adriana Cerretelli also believes that Greece’s latest proposal is an opportunity to “save face” and put an end to a dangerous tug-of-war between Greece and its international creditors.

 ©europeanunion2015

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