Greece and its Eurozone members are unlikely to conclude negotiations in Riga on Friday, although officials remain hopeful that a deal could be finalized in the coming weeks, sources out of Brussels said on Tuesday.
In a day that saw Greek shares plummet, news emerged from Brussels, Belgium that a resolution to Greece’s debt crisis was unlikely to be reached at this week’s Eurogroup meetings, pushing Athens dangerously close to default. Dutch finance minister and head of the Eurogroup Joren Dijsselbloem said he is still confident that a deal would be reached in the coming weeks.
Greece’s troika of lenders – the International Monetary Fund, European Union and European Central Bank – are expected to block Athens’ next bailout tranche valued at more than €7 billion should the Greek government fail to carry out structural economic reforms regarding privation, taxes and pensions. This next bailout tranche is essential to keep the Greek government running and avoid defaulting on future debt payments. However, agreeing to the reforms would put the Greek government at odds with its voters.
“Very dangerous instability” would characterize the Eurozone if Greece exits the currency union, Dijsselbloem said. “It’s in the interests of Greece and the Eurozone as a whole to avoid that.”
Greece’s stock market plunged more than 3 percent on Tuesday, falling to its lowest level since 2012. Jitters reached a tipping point on Tuesday after the Greek government issued an emergency decree ordering reserves from state and local agencies. This “internal loan” to the Greek central bank was met with harsh criticism inside Greece.
Greek Prime Minister Alexis Tsipras will meet with German Chancellor Angella Merkel at a European Union summit on Thursday. Both sides are expected to discuss the bailout crisis. Eurozone finance ministers are refusing to set deadlines for an agreement because those methods have been tried before with very little success.