"Time is running out. But there is a great determination among our Greek colleagues," said Dijsselbloem.
- Greek officials told reporters that the country was making progress on lowering its budget surplus target.
- However, EU officials told Reuters: "Wide differences remain over reforms of the labor market, pension system, taxation and public finances."
And there's little expectation a solution will be reached in Riga.
"Officials are stressing that they're not expecting any sort of solution at this meeting," Jonathan Loynes, Chief European Economist and Director of Capital Economics told Sputnik News. "They're not really expecting much…
"It's generally decided that it's not a good idea setting Greece specific deadlines. If deadlines are missed, market concerns increase. If you set deadlines and the meeting passes without a deal, there's real concern that it will prompt another flurry of money out of the banks."
Accidental Grexit From Eurozone
But according to Loynes, there are downsides to not setting deadlines. He says it reduces the pressure on Greece to come up with the reforms to unlock the bailout money and could potentially lead to Greece accidentally exiting the eurozone.
"I think Greece will leave at some point. We said that five years ago. I can't see a lasting solution for Greece in the currency union," Jonathan Loynes told Sputnik News.
"We're meeting the crunch point when they'll run out of money. The authorities are not in control of this situation which raises the prospect of an accidental exit from the eurozone over the next few months."
According to Loynes, there's around a 50 percent risk that over the medium horizon, Greece is going to leave the currency union.
"It is simply not making any real progress.
"It's not just about scrabbling around for money down the back of the sofa, they've got big repayments to make."
The Greek government needs $7.8 billion (7.2 billion euros) to tide it over for the next few months. Without the money — the country will default — and potentially, leave the eurozone. But this, says Loynes, is not necessarily a bad thing.
"There are certainly potential medium to long-term positives for Greece leaving the currency union. Its stuck in one it doesn't really belong to. It doesn't behave like other economies in that union."
But whether Greece remains in or leaves the eurozone, albeit by accident, Loynes doesn't believe the actions will be determined through a rational decision process.
"A Grexit could be down to economic failures, not as a result of decisions made by policy makers."
http://sptnkne.ws/f3s
24/4/15
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Greece Heads for More Crunch Talks with European Creditors ...
ReplyDeleteGreece sought to downplay the scale of its differences with its bailout creditors as the eurozone’s top official said Friday that time is running out for the country to secure a deal that will prevent its bankruptcy.
Though Eurogroup president Jeroen Dijsselbloem signaled it would be hard to get a deal at the meeting of 19 Eurozone finance ministers in the Latvian capital of Riga, he said he hoped to be able to report some progress later.
He said there's a “great sense of urgency” from all sides to get a deal done, particularly for Athens so the country can get the financial support it needs “to make sure there's enough money available to keep the government running.”....AP........voanews.com
24/4/15