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Home » Featured » Greece, EU Race for Sunday Debt Deal

Greece, EU Race for Sunday Debt Deal

Posted by FXTimes in Featured - May 2nd, 2015 7:39 pm GMT

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Greece was back at the negotiating table with international creditors on Saturday, as Europe’s most indebted nation races to iron out a a solution by Sunday in order to facilitate a final agreement at this month’s ministerial meetings.

The Greek government has shown greater resolve in the days leading up to the weekend talks, as the prospect of a default hangs in the balance. The Hellenic Republic of 12 million could face default as early as this month should it fail to reach new bailout terms with its troika of creditors – the European Union, European Central Bank and International Monetary Fund.

Greek finance minister Yanis Varoufakis, who was sidelined as head negotiator earlier this week, said Athens would not request a new bailout on the condition that the troika restructure the current debt agreement.

Varoufakis has taken a hardline approach in negotiating Greece’s new bailout terms, having described the Eurozone as a “shaky monetary system” that “if not changed, will die.” The Greek finance minister was much more diplomatic on Saturday, dismissing the possibility of Greece leaving the euro. Such a “Grexit” scenario is more likely to materialize than ever before, according to a recent poll by Bloomberg Markets.

A clear majority of investors (52 percent) polled by Bloomberg said Athens will exit the Eurozone, compared to just 31 percent who said the same in January. The percentage of investors saying Greece would remain in the euro fell to 43 percent from 61 percent in January.

May 11 Eurogroup Meetings

Greece and European Union finance ministers are racing to iron out a tentative agreement by Sunday to leave enough room for final ratification at this month’s Eurogroup meetings, which will be held in Brussels. A failure to finalize an agreement by the next ministerial meetings could push Greece dangerously close to a default.

“They’re working hard now and that’s what we’ve gained,” Dutch finance minister and Eurogroup head Jeroen Dijsselbloem told reporters. “But in the end we only look at the results and we’re not that far yet.”

The Greek government has sent mixed signals about its willingness to implement reforms that would unlock future bailout aid. Prime Minister Alexis Tsipras expressed optimism at the prospects of an agreement earlier this week, a sign the leader was prepared to compromise on his far-left Syriza party’s political platform.

Syriza swept to power in January on the platform of “anti-austerity.” Public opinion of Syriza’s handling of the debt negotiations declined last month, according to latest polls.

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