By N. Bellos
The European Commission has apparently assumed the role of distant “mediator” in the ongoing impasse over the Greek program, given the latest leaks out of the IMF that point to the non-sustainability of the country’s debt — according to the Fund — while the embattled leftists in Athens have at the same time erected a new “red line” against precautionary austerity measures demanded by creditors.
According to a Eurozone source, no new developments were recorded on the Greek issue since last Thursday’s Eurogroup meeting in Brussels, where EZ ministers essentially adopted a “wait-and-see” position on the once-again sputtering Greek bailout. Nevertheless, the lack of progress at the Eurogroup meeting means that no date was set for a return of creditors’ representatives to Athens for negotiations.
The leaks out of Washington over the IMF’s report on debt sustainability have cast another shadow over the Greek program and caused displeasure among European creditors, with the ESM’s leadership in subsequent days making very public statements that the Greek debt was sustainable and manageable “as long as agreed to reforms were applied”.
Toeing the line by European creditors, a Commission spokeswoman on Monday warned against an “over dramatic” response to the IMF leaks, while merely saying Brussels is waiting for the official release of the Fund’s position on Greek debt sustainability.
The spokeswoman also cited the recent approval and activation of a set of short-term relief measures by the ESM for the Greek debt.
Conversely, officials in Brussels have taken note of repeated and high-level statements coming out of Athens that preclude any taking of measures to allay creditors’ concerns that fiscal targets won’t be realized after 2018 — when the current program ends.
Essentially, the mood among European creditors is that without taking such measures — a standing IMF demand — no agreement to conclude the second review of the Greek program, and thus free up scheduled loan tranches in the coming period, will be possible.
Another source out of Brussels on Monday, however, said the Commission has no intention at present to assume any kind of initiative to break the deadlock, given that Brussels doesn’t see the right conditions.
