Greece – Stalling negotiations

There are growing signs that the Greek negotiations are stalling and that a deal could not be reached this week. A deal would provide Greece with all or part of the frozen funds of the Fifth Review (€7.2bn) and probably include an extension of the current programme (from end-Juneto end-September).

As explained by Eurogroup President Jeroen Dijsselbloem officially on 11 May, the first step is an agreement at the staff level which would trigger a special Eurogroup meeting. A key question regards the potential involvement of the IMF. Press reports after the European Council in Riga suggest that Chancellor Merkel and President Hollande indicated to Greek PM Tsipras that the IMF involvement is required. That sets the bar high for a deal before the end of May. 

Indeed, the IMF status requires that before any release of financial support,

• 1) Greece be able to meets it financial obligations for the next 12 months  
  
  
• 2) Greece public debt becomes sustainable