As we’ve said, Greece’s creditors are continuing to demand that Greece give in on the two key sticking points in negotiations, that of pension and labor market “reform”. Given that Tripras has continued (if anything even more loudly via his Le Monde op ed and Parliament speech last week) to insist that he is not crossing his red lines, it’s hard to know what to make of the creditor offer.
Are they really not hearing Tsipras, or is this an effort to carry forward the Eurocrats’ narrative that they’ve tried everything? Plus Tsipras may have interpreted this offer as a sign of creditor weakness, emboldening him and Varoufakis to hold firm. We have separately pointed out that anything beyond small and/or cosmetic concessions on pensions would be a difficult sell to all of the 18 Eurozone nations that have to approve a deal, and this concession from the creditors even less conceivable the later the political sausage-making process starts.
Notice the timing. This proposal was made last week. It thus was presumably included in what Tsipras characterized as “absurd” creditor demands in his fiery speech to Parliament last Friday. It has thus not just been rejected but rejected with vehemence. Note also that the Tsipras’ interlocutors were acting as an intermediaries, and brokers are known for suggesting ideas they hope they can sell to their principals. The report stresses that it was not clear whether Juncker and Djisselbloem could deliver on this offer even if Greece had been game.
Greece’s international creditors have suggested extending the country’s bailout program until the end of March 2016, but disagreements over the conditions attached to the continued support and what would happen afterward risk undermining that plan, three people familiar with the negotiations said Monday…
“What we offered would mean that Greece is fully financed until March 2016,” said one person, referring to a meeting last week between European Commission President Jean-Claude Juncker, Greek Prime Minister Alexis Tsipras and Jeroen Dijsselbloem, the Dutch finance minister who represents eurozone governments in the talks.
At that meeting, Messrs. Juncker and Dijsselbloem offered the extension and the extra funding in return for Greece implementing policy overhauls as well as pension cuts and tax increases, the people said. But Mr. Tsipras rejected those terms as “unacceptable.”
Failure to reach a deal on the conditions attached to new aid now risks undermining the deal offered at Wednesday’s meeting, one of the people said. “Every additional day of capital outflows [from Greece’s banks] means less money can be taken from the [bank recapitalization fund and used to repay debt] and instead has to be used to stabilize the banks,” this person said.