Greece resumed efforts to break a deadlock with its creditors as weekend polls showed a majority of the country’s people want the government to make compromises needed to release funds for its economy.
Two opinion polls published over the weekend showed a continuing drop in support for the government’s confrontational stance in talks with the euro area and the International Monetary Fund. More than half of respondents in an Alco survey in Proto Thema newspaper said the government should compromise even if creditors reject Greek demands.
“The Greek people are absolutely clear that they want to stay in the euro come what may,” said Aristidis Hatzis, associate professor of law and economics at the University of Athens. “They’ve understood that it will require hard compromises, even austerity.”
Greece is struggling to amass cash to pay its pensioners and employees this week. Europe’s most-indebted state is counting on deposits of local governments, cities and other funds to meet end-of-month payments of over 1.5 billion euros ($1.62 billion) after euro-area finance ministers on Friday said they won’t disburse more aid until bailout terms are met. State coffers will be further strained on May 6, when Greece needs to find 200 million euros for an IMF payment.
Negotiations between the country and creditor institutions will resume with a call on Monday and a meeting on Wednesday in a bid to speed up the process, a Greek official said Sunday. The main sticking points in discussions so far have been over labor market and pension reforms and state asset sales.
Greek stocks rose, with the Athens Stock Exchange index gaining 0.5 percent at 12:32 p.m. local time. Three-year Greek government bond yields gained 12 basis points to 26.42 percent.
Political instability and the situation within Greece are potential “enemies” of an economic recovery, Spanish Prime Minister Mariano Rajoy said in Madrid on Monday.
Greece’s anti-austerity coalition has fought to unlock aid since striking a deal to extend its bailout program in February. The government has repeatedly expressed confidence that a deal was imminent, only to be rebuffed by euro-area officials seeking concrete steps. Last week was no different: days after Finance Minister Yanis Varoufakis said views were converging, his counterparts across the region hit him with a volley of criticism.
Greek Prime Minister Alexis Tsipras held a call with German Chancellor Angela Merkel and Eurogroup President Jeroen Dijsselbloem to discuss progress in negotiations, a government official in Athens said Sunday. Germany’s Bild newspaper reported Monday that Tsipras asked Merkel to convene an emergency European Union leaders’ summit. A Greek government spokesman denied the report in a text message.
“We’re approaching a fairly decisive point,” Brendan Brown, head of economics research at Mitsubishi UFJ Securities International Plc in London, said in a Bloomberg TV interview. “The big issue is whether there’s actually going to be a fixed day denouement or not. I would subscribe very much to a view that even if this does end up with some sort of default or Grexit, we’re not going to know on the day it happens.”
Support for the government’s confrontational stance fell to 46 percent in a University of Macedonia poll for Skai TV published on Tuesday, compared with 56 percent a month earlier. Two polls published over the weekend showed most Greeks want the government to strike a compromise with creditors.
According to a Kappa Research survey published in To Vima weekly, 71.9 percent of those surveyed said a deal with creditors would be best for the country, while 23.2 percent said they prefer a clash. The Alco survey showed that 50 percent of respondents want a compromise even if creditors reject Greek government demands, while 36 percent said the government should opt for a “rupture.”
While only 27 percent of respondents in the Alco survey said they would back a referendum on a deal, if done with the agreement with the country’s creditors, it could offer a Tsipras a means of circumventing opposition within his own party, according of Hatzis, of the University of Athens.
“A referendum would close the discussion,” he said.
As the deadlock in talks over the disbursement of emergency loans to Greece continues for the eighth consecutive month, the consensus at the IMF meetings in Washington this month was increasingly that a Greek default would be systemically manageable, UBS Chairman Axel Weber told the Swiss newspaper Neue Zuercher Zeitung.