By N. Bellos & G. Kampourakis
The purportedly leaked minutes from Monday's Eurogroup meeting in Brussels, which failed to generate an agreement between creditors over the Greek bailout, point to a stormy session and a continued hard-line stance by German FinMin Wolfgang Schaeuble.
According to the Athens-based site Euro2day, which published an extensive translation of what it says were the meeting's minutes, Berlin's stance comes off as unbending, and as a looming obstacle to any compromise with the IMF. The latter demands "specificity" over Greek debt relief measures; Berlin essentially wants decades of high fiscal targets and accompanying high Greek growth rates in order to preclude any substantial tinkering with the country's debt.
Conversely, several Euro zone finance ministers, as per the minutes, chided the IMF's long-term forecasts for the Greek economy as too pessimistic, as IMF Europe director Poul Thomsen - the former chief IMF auditor for the Greek bailout - predicted an average yearly growth rate of 1 percent over 40 years.
The Fund's forecast was also panned by Commission representatives and EZ finance ministers that spoke during the meeting.
The European side's argument was first brought forth last week, when a Euro zone official close to the negotiations said it was inconceivable that anyone could make a serious prediction for economic growth over such a lengthy period, and especially for a country with Greece's characteristics.
A more contentious part of the deliberations began when the issue turned to primary budget surplus targets (as a percentage of GDP) that the Greek state must post an annual basis until 2022. The IMF stuck by its more realistic position of a target of 1.5 percent of GDP.
When his turn to speak came up, German FinMin Wolfgang Schaeuble, the minutes show, said any clarification over medium-term debt relief exceeds a relevant decision taken at a Eurogroup meeting exactly a year ago. He also warned that he lacked a mandate from the German Bundestag to discuss anything outside that framework.
"I cannot negotiate over a new mandate, therefore, the basis must be this (the May 2016 agreement). We did not veto the IMF, neither we nor the Netherlands. Let me remind you that we have already approved of two (Greek bailout) programs by the Fund," Schaeuble said in German, according to the minutes published by Euro2day.
Thomsen then intervened to state that the Fund will not consider the Greek debt as sustainable under these circumstances, to which Schaeuble responded that "it is not acceptable that one compromise (2016) leads to another. I do not have the authorization. If this is the path, then good luck, we won't find a solution."
A recess was then called to allow Eurogroup chairman Jeroen Dijsselbloem the opportunity to have separate contacts with representatives of the IMF, Germany, France and Greece.
It's at this point that Greek FinMin Euclid Tsakalotos reportedly contacted Greek Prime Minister Alexis Tsipras to brief him over the proposal on the table.
The proposal presented to Tsakalotos, in this case, was for a solution without a report by the IMF characterizing the debt as sustainable -- something that sources in Brussels later said would be a grim result for Athens.
Dijsselbloem, who unveiled the proposal towards the end of the marathon session, also acknowledged that the markets would continue to have reservations on Greece creditworthiness, given the nebulous role of the IMF in the Greek bailout.
New French Economy Minister Bruno Le Maire also appeared negative, saying the proposal was far from the "clear-cut" solution requested by Emmanuel Macron and the Greek side.
When the session resumed, Tsakalotos briefed his counterparts that Greece is not rejecting the proposals outright, while repeating that the country has made huge sacrifices, and that the stated document has elements that could work for Greece. He qualified his statement by saying that if one of the institutions (creditors) maintains that the debt is not sustainable then there's no clear-cut solution that the markets expect. He also said he was "personally" committed to implementing all prior actions, while more time is necessary for the debt.
Tsakalotos added, however, that signing the document would create a major political crisis in Greece (i.e. for his leftist-rightist coalition government), saying he needs more time to consider the option.
At that point, Dijsselbloem attempted to concluding the session, merely saying that all efforts will be extended to achieve an agreement at the next Eurogroup (June 15).
However, the powerful German FinMin got the last word:
"Let's not have illusions. This was a massive failure," while sharply criticizing those who, as he said, spoke earlier to the mass media and cultivated expectations.
