Athens and EU finance ministers remain at loggerheads but if an agreement is not reached by this weekend there are many long-term consequences The Athens government has been in debt talks with its international creditors for months in a bid to get them to release a last chunk of held-up bailout funds and avert bankruptcy. It needs the money to meet debt repayments and without it there is a fear that Greece will end up defaulting, which could precipitate its exit from the eurozone. Related: Greek default fears hit markets, as commissoner predicts "state of emergency" - live updates Related: Markets slide as fears grow that Greece is close to defaulting on debt Related: Unsustainable futures? The Greek pensions dilemma explained The fact is, unless some significant concessions are made on either side a default is now more or less inevitable, and even if a plan were agreed that was agreeable to the creditors, it is unlikely that the Greek government would be able to get it through their parliament.Given that Germany won’t countenance anything like debt relief at this point, we are likely set to see a continuation of this game of political cat and mouse through this week’s eurogroup finance ministers meeting on Thursday, and beyond to the end of the month.Our economists’ base-case scenario (60% probability) remains that a last-minute deal will be struck, leading to a semi-stable scenario, but most likely not before the EU Summit on 25-26 June.Mr Tsipras had better get ready to blink if he wants to get a single additional euro from Germany or, indeed, any of the other member countries. Of course, he too may have given up on reaching an agreement and is keeping up appearances simply to impress Greek voters. Either way, he is no longer in Last Chance Saloon but No Chance Saloon. Continue reading...
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