By SARA SJOLIN, Market Watch
Eurozone finance ministers meet in Brussels on Monday to take another crack at brokering a deal on Greece’s bailout money.
But after months of negotiations and very little progress, expectations are still low that this will finally be the meeting where the anti-austerity Greek government and its lenders agree on a reform program to unlock the next tranche of financial aid.
The country faces a 750-million-euro ($837 million) loan repayment to the International Monetary Fund on Tuesday, and economists fear Athens is rapidly running out of money. However, the government has so far staved off a default, partly by forcing state-owned companies and public pension funds to transfer their cash reserves to the central bank.
European officials and economists suggest Greece can last at least well into June, removing the notion that Tuesday’s Eurogroup meeting is the final deadline to reach a deal before Greece goes bankrupt.
Here are some pre-meeting expectations from European economists…
“On Greece, with considerable differences remaining between the government and the creditor institutions, the chances of a comprehensive agreement being reached at this afternoon’s Eurogroup ministerial meeting seem very low indeed. Despite the better tone to discussions since [Greek finance minister Yanis] Varoufakis was sidelined from active negotiations, finance ministers seem bound to conclude that Greece still lacks a coherent reform program and prudent budget plans.” — economists at Daiwa Capital Markets
“[Prime Minister Alexis] Tsipras remains between a rock and a hard place and simply can’t satisfy the IMF and EU without losing all credibility with his electorate. However, the prospect of not receiving additional aid risks a disorderly exit for Greece, and the tangled financial web that surrounds their existing assets and debt could deliver some unexpected headaches for the market.” — Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor
“They have managed to find enough loose change at the back of the sofa to pay state wages and pensions as well as repay the last installment of €200 million to the IMF, but going forward — without agreement on reforms — it is going to be very difficult not to default at some point this summer, unless there are other items of furniture from under which funds can be scraped together.” — Angus Campbell, senior analyst at FxPro
“Groundhog week for Greece […] Greek officials have been preparing for today’s Eurogroup summit in Brussels following a weekend of ‘feverish’ negotiations as the pressure mounts on Athens to take action to avoid defaulting on its debt. PM Tsipras’s government is due to repay €750 million to the IMF on Tuesday this week. Eurogroup officials are concerned that a very real chance of Greece going bankrupt exists at the current time.” — Mike van Dulken and Augustin Eden at Accendo Markets
“We continue to see a 70% chance that Greece will eventually strike the necessary deals and stay in the euro, potentially at the cost of renewed domestic political turmoil. But the risks are still serious. German finance minister Schäuble warned on Friday that defaults can happen suddenly. The inexperienced Greek government might have overestimated its financial resources.” — Holger Schmieding, chief economist at Berenberg
