Tsipras Returns to Reality After Meeting Putin

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What's Greece's Strategy? Cross Your Fingers and Hope

When his plane touches back down in Athens, Greek Prime Minister Alexis Tsipras will be quickly reacquainted with reality.

Talks with Russian President Vladimir Putin in Moscow on Wednesday focused on a proposed energy pipeline, future investments and sanctions over the conflict in Ukraine, a meeting that had been dismissed before it began by Germany and France as a sideshow. With a payment made to the International Monetary Fund on Thursday depleting Greek cash reserves still further, it’s back to haggling with creditors in the euro region over a financial lifeline.

“There’s been a big fuss over this trip without immediate economic benefits,” said Dimitris Sotiropoulos, an associate professor of political science at the University of Athens. “Now he needs to do something quickly. There’s an unbalanced negotiation now, where the Greek side is prepared on some issues and completely unprepared on others.”

With a monthly bill of about 1.5 billion euros ($1.6 billion) for pensions and salaries, Greek officials this week said they are targeting an April 24 meeting of euro-area finance ministers as a deadline for approving new money. A looming cash crunch in the summer, when the European Central Bank needs to be repaid, means any respite would be temporary.

“I am confident that an agreement will be reached by the next Eurogroup meeting,” Italian Finance Minister Pier Carlo Padoan said in an interview with Bloomberg Television’s Haslinda Amin in Singapore on Thursday. “The situation is going in the right direction.”

A meeting of the currency region’s representatives late on Wednesday piled more pressure on the Greek government to start negotiating in earnest if it is serious about obtaining liquidity, according to two European Union officials.

Working Easter

European Commission spokesman Margaritis Schinas said earlier Wednesday that there was “progress step by step.” Discussions will continue during the Orthodox Easter weekend in Greece, he said. Even so, with many finance chiefs attending IMF meetings in Washington next week, time is running out for Greece to meet its self-imposed target.

The government has met its obligation to pay the IMF about 450 million euros, a finance ministry official said. Interior Minister Nikos Voutsis had suggested that pensions and salaries would come first.

The negotiations on more aid are focused on honing an initial agreement reached in February over reforms including tax collection and maintaining sales of state-owned companies.

“We are ready to accelerate those negotiations but we also need to see progress on the Greek side,” European Commission Vice President Valdis Dombrovskis said in an interview in Bucharest. “In recent weeks we are seeing some change of attitude from the Greek government’s side and they are becoming more serious in terms of actually implementing the program commitment, but there is still lots of work to do.”

Breathing Space

Greece’s goal is to unlock about 7 billion euros of aid from its existing program before likely having to conclude another one to be able to repay the ECB for bonds it bought under a program to prop up local debt markets.

Greek banks, which have lost about 28 billion euros in deposits since October, will be looking for more breathing space from the ECB. The Governing Council is scheduled to hold a telephone conference on Thursday to assess the size of emergency-liquidity assistance provided by the Greek central bank, according to two people familiar with the matter.

Since Greek lenders lost access to normal ECB funding lines in February, policy makers raised ELA every week. On April 1, they increased the available amount by 700 million euros to just under 72 billion euros.

Greece’s unemployment rate in January dropped to 25.7 percent from a revised 25.9 percent the previous month, the Athens-based Hellenic Statistical Authority said in an e-mailed statement Thursday. The rate is down from 28 percent in September 2013.

Trip Concludes

Tsipras’s visit to Russia, which concludes on Thursday, was aimed at enhancing Greece’s trade, its role as an energy hub and to look at boosting tourism, he said at a press conference with Putin. Russia was Greece’s biggest trading partner until volume fell by 40 percent last year, Putin said at the meeting.

It didn’t yield any promises of financial assistance or specific deals, though Greece said it hadn’t requested aid.

“Greece isn’t a beggar asking different countries to solve its financing problems for an economic crisis that doesn’t concern only Greece but is European,” Tsipras, 40, said in Moscow. “It’s not a Greek problem, it’s a European problem. To the European problem, a European solution will be found.”

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