LUXEMBOURG — Eurozone finance ministers began a critical meeting on Thursday with plenty of consensus on the urgency of avoiding a Greek default and exit from the euro but apparently few new ideas on how to reach a deal.
“Too little progress has been made. There are still some major gaps between the Greek position and the position of the institutions,” Jeroen Dijsselbloem, who chairs the Eurogroup of finance ministers, told reporters as he went into the talks.
Even he didn’t know whether his Greek colleague Yanis Varoufakis would put any new ideas on the table or, as Varoufakis has said, just sit and wait for his EU colleagues to come up with a solution.
“I would welcome it. As you know, time is becoming very, very short,” said the Dutch minister. “The only thing I know is that the program we have, which we have extended, runs out at the end of the month. Then all the funds we have to support Greece will return to the EFSF (European Financial Stability Facility) here in Luxembourg and will be unavailable.”
Athens and its international creditors represented by the European Commission, European Central Bank and International Monetary Fund have been kicking back and forth responsibility for the breakdown in negotiations, which has created a growing climate of concern that no deal will be reached by the end of the month.
“Today, the time is almost up and the ball is in the Greek court,” tweeted Pierre Moscovici, European Commissioner for Economic and Financial Affairs.
Greece has been trying for months to secure payment of a final €7.2 billion tranche of its second international bailout, under a program which is due to expire on June 30. The same day, it is liable for debt repayments to the IMF of about €1.6 billion, which may be impossible without a fresh injection of cash.
German Chancellor Angela Merkel pointed the finger accusingly at Greece in a speech to the Bundestag earlier Thursday. Repeating her familiar adage that “where there’s a will, there’s a way,” she added: “If the political leaders in Greece show this will, an agreement with the three institutions is still possible.”
Her finance minister, Wolfgang Schäuble, made it clear as he went into the Luxembourg talks that eurozone ministers were “waiting for Greece to make proposals. The time is getting tighter and tighter.”
Varoufakis, who told reporters in Paris Wednesday that it was up to national leaders rather than finance ministers to find an accord, told reporters before the meeting that its aim was to overcome “costly discord.”
Greece’s own central bank issued its first warning Wednesday that failure to resolve the dispute could lead not only to default and a so-called “Grexit” from the single currency. U.S. Federal Reserve chief Janet Yellen adding to the general alarm, pointing up “the potential for disruptions that could affect the European economic outlook and global financial markets” if there is no deal.
But Germany’s central bank president, Jens Weidmann, was one of the few voices trying to play down the existential threat posed by a potential Greek exit from the currency area.
“The continued existence of the euro is not tied to the development in Greece. But certain contagion effects cannot be ruled out because the character of monetary union would be altered by a ‘Grexit’,” the Bundesbank president told France’s Les Echos.
Greek Prime Minister Alexis Tsipras chose Thursday for a visit to St. Petersburg to meet Russian President Vladimir Putin, which will fuel speculation that Athens could seek Russian assistance in the absence of a deal with its international creditors.