By N. Bellos
Creditors’ top negotiators will have to return to Athens this week in order for a staff-level agreement to be achieved by the April 7 Eurogroup meeting, otherwise the delay could extend into May, with the commensurate negative impact on the still-recession plagued Greek economy.
European officials echoed that sentiment in Brussels over the weekend, while pointing to language used by Commission President Jean Claude Juncker in a response to a letter by Greek Prime Minister Alexis Tsipras, ahead of the Rome summit, with the former urging for a rapid agreement.
Juncker’s diplomatic and more-or-less Delphic response, namely, that all sides must work responsibly towards a staff-level agreement for April 7, is judged as the most important point in the letter.
The reference to a specific date, April 7, by a top European official is also a first. Neither Eurogroup chairman Jeroen Dijsselbloem nor EU Commissioner Pierre Moscovici had previously cited any date as an “unofficial deadline”.
One Community source said Juncker’s reference to a specific date was due to figures showing repercussions from the ongoing delays, such as a continuing recession and higher unemployment figures from the fourth quarter of 2016.
Although little time remains ahead of the latest date cited as a deadline, sources in the Belgian capital estimate that both sides – Athens and creditors – know the other side’s positions very well, allowing for a quick resolution if a decision is taken to conclude the negotiations.
Four days worth of negotiations last week in Brussels reportedly recorded significant progress over fiscal issues. Conversely, labor market reforms and power sector liberalization remained unresolved.
On its part, the increasingly embattled Tsipras government in Athens is continuing to publicly insist that it wants a “comprehensive” agreement that will include medium-term debt relief measures and an exact listing of primary budget surplus targets for after 2019.
Nevertheless, more pessimistic estimates hold that a staff-level agreement is remote before the annual spring IMF summit in Washington (April 21-22), with the Greek side laying the blame on the IMF for its “rigid” position on labor market reforms.
For the leftist-rightist coalition government the demand to restore obligatory collective bargaining in the country between unions and employers’ groups is considered as its “Holy Grail” in negotiations, even if gasping talks risk tanking the Greek economy’s recovery in the first half of 2017.
According to reports, the Tsipras government is attempting to win a concession on the labor sector front that will be portrayed as a victory, and in order to smooth over reactions to concessions on practically all creditor demands — such as pension cuts, a lower tax-free income threshold, energy sector liberalization and even the sell-off of several power stations in northern Greece operated by the dominant state provider (PPC).
The Tsipras government, when and if it concludes negotiations, will have to present the draft agreement with creditors to parliament for ratification. As such, a deal that includes only austerity measures and stepped up free market reforms will not meet with an enthusiastic response by the slim 153-deputy parliament majority of MPs that keep the coalition government in power.
