By AP
RIGA, Latvia—When is a deadline not really a deadline and a deal not really a deal?
When it’s to do with Greece’s bailout, apparently.
The country had an end-of-April date to agree to more reforms in exchange for rescue money its creditors had set aside. But as the country prepares to confront its European creditors on Friday at a meeting in the Latvian capital of Riga, all sides say an agreement is a long way off.
The lack of a plan that might protect Greece from defaulting and even falling out of the euro is darkening the clouds of uncertainty over the country, destabilizing its banks and threatening a long dreamed-of economic recovery.
Global financial officials gathered in Washington D.C. last week said Greece remains one of the biggest risks to the world economy even though the 19-country eurozone has done a lot over the past five years to insulate itself.
For weeks the meeting in Riga was expected to be the one when Greece’s immediate financial future would be sorted out. Greece’s left-wing government, elected in January on a mandate to bring crippling austerity to an end, would present its reform plans to its creditors in the eurozone. If all worked out as planned, Greece would be handed the remaining money available in its bailout program—7.2 billion euros ($7.7 billion)—to pay off upcoming debts to its creditors in the eurozone and the International Monetary Fund.
Calm would be restored, fostering confidence in the Greek economy.
But it’s never that simple when Greece is concerned.
After weeks of tortuous discussions that have yielded little besides distrust, Greek Finance Minister Yanis Varoufakis is not expected to present any reform plans on Friday. Creditors are demanding reforms that include sweeping changes to pensions and labor rules. But the Greek government has ruled out many key demands, arguing it was elected to end the kind of stifling budget austerity that contributed to a 25 percent contraction in the economy. Its focus is geared far more on fighting corruption and increasing its tax take than more cuts.
The timing of a deal is likely to depend on when Greece runs out of money and can no longer afford to resist the creditors’ demands. When that will happen is unclear, too.
The country was forecast to run out of money at the end of this month, but is scraping together spare cash from municipalities and state enterprises like hospitals and the national gallery. That could give it 2 billion euros ($2.1 billion), enough to get through May, when it has to pay 1 billion euros to the IMF. A country can technically delay a payment to the IMF, but it’s never been done before by a developed country.
One official said the only deadline that matters is the end of June, when the European part of Greece’s 240 billion-euro international bailout expires. If Greece can rummage cash to survive until then, talks could keep on going. It owes the IMF another 1.5 billion euros in June.
The next gauge of progress could come from a meeting Thursday between Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel on the sidelines of an emergency summit on migration.
