Talks for $94B Greek Bailout Stall Again as Next Deadline Approaches
Talks between Greece and European creditors — which are needed to finalize bailout — were supposed to begin Friday. However, the discussion was scrapped due to reported logistical, security and political reasons.
“It is fundamentally more of the same,” the unidentified senior official told the Financial Times. “They don’t want to engage.”
Tsipras’ government is in the process of implementing the new fiscal reforms mandated by the creditors in exchange for nearly $95 billion (€86B) in relief aid. Once those reforms are approved, the cash will finally begin flowing to help Athens navigate the treacherous debt maze it has recently been mired in.
Athens has also formally requested additional loan help from the IMF.
Despite its agreement on the third bailout, Greece also still faces the prospect of being expelled from the euro — a notion that’s generating split opinions among the global financial community.
Some analysts believe Greece’s exit would have a far-reaching economic impact — particularly because part of the eurozone’s purpose is to facilitate European market prosperity through a system of unified currency. German Chancellor said Greece’s expulsion will create “chaos.”
However, others believe a clean break is exactly what Greece — and Europe — need.
Saturday, both the New York Times and Forbes magazine wrote pieces that detailed how a “Grexit” from the euro would be advantageous.
“Unfortunately for Greece and for Europe … the new agreement will most likely drag Greece through three more years of a long-lasting, costly experiment that has so far failed miserably,” Hans-Werner Sinn wrote in an op-ed piece for the Times. “The better alternative is a ‘Grexit’ accompanied by debt relief, humanitarian aid for the purchase of essential imports and an option for eventual return to the euro.”
“That Greece should leave the euro is something that is pretty much established as the revealed truth in Anglo-Saxon economic and commentary circles. Sadly it is not so established either in European economic circles nor in any political ones,” Tim Worstall wrote in Forbes.
Similar sentiment has been expressed in recent days by experts writing for outlets like Britain’s Telegraph and the Washington Post.
Greece is up against the clock on finalizing the deal, as a $3.5 billion loan payment to the IMF must be paid by Aug. 20 — an installment Athens will not be able to make without the new relief funds.
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