Tsipras Asks for Courage as EU Plays Down Chances of Deal

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Greece's Prime Minister Alexis Tsipras
Greece's prime minister Alexis Tsipras, said, “there’s no technical issue anymore for reaching this deal, there’s only a matter of political will.” Photographer: Kostas Tsironis/Bloomberg

Prime Minister Alexis Tsipras said Friday there are no more technical reasons to withhold aid from Greece. The country’s creditors are not convinced.

Hours after the Greek leader told lawmakers in Athens that the euro area needed only political courage to unlock more financial aid, a European Union official in Brussels told reporters there’s still technical work to be done before Europe’s most-indebted state will get any more money.

Euro-area finance ministers meet in Brussels on Monday with the European Central Bank seeking significant progress toward an aid payment to justify the emergency funding keeping Greece’s banking system afloat. The bloc signaled some progress in recent days and the official said the structure and organization of the negotiations have improved. Still, his assessment of the progress fell short of the Greek leader’s.

“The government has proved that it’s doing everything it can to reach an honest deal within the EU, an honest and mutually beneficial deal with its creditors,” Tsipras told lawmakers in Athens on Friday. “There’s no technical issue anymore for reaching this deal, there’s only a matter of political will.”

Greek stocks fell, with the benchmark Athens Stock Exchange dropping 0.3 percent at the close. The yield on 10-year bonds fell 18 basis points to 10.71 percent.

Liquidity Shortage

Dutch Finance Minister Jeroen Dijsselbloem said a potential liquidity shortage in Greece may hasten the pace of negotiations.

“Politically there is only one deadline -- that’s end-June when the second plan will end,” Dijsselbloem, who also chairs meetings of the currency bloc’s finance ministers told French daily Le Monde on May 7. “But there could also be another deadline if Athens’ liquidity problems became too pressing. It’s in our common interest to avoid getting there.”

Greece has less than a week to prove to the European Central Bank that it’s serious about closing in on an agreement with international lenders. Though euro-area ministers aren’t expected to reach a deal Monday, a repetition of the acrimony and name-calling seen in last month’s meeting, or a failure to repay about 750 million euros to the International Monetary Fund due Tuesday, may prompt the central bank to impose tighter liquidity rules on its banks.

Happy Ending

Both Tsipras and Greece’s finance minister Yanis Varoufakis have said that an agreement with creditors, which would pave the way for resuming aid flows and avert a default, is within reach. Tsipras has spoken twice this week by telephone with German Chancellor Angela Merkel.

“I’m optimistic that we will soon have a happy ending and, despite the difficulties we will face, with the people’s support, we will manage to accomplish a deal,” Tsipras told Parliament on Friday.

Greece’s government has repeatedly expressed confidence a deal was imminent, only to be rebuffed by European officials seeking more specific policy proposals in areas including labor market deregulation, a pension-system overhaul, and sales tax reform. The standoff has led to an unprecedented flight of deposits from Greek banks and renewed concern over the country’s future in the single currency.

“Europe works in glacial ways and eventually does the right thing after trying all alternatives,” Varoufakis told the BBC on Thursday. “So we probably won’t have an agreement on Monday, but certainly we’re going to have an agreement in the next couple of weeks or so.”

For more, read this QuickTake: Greece's Fiscal Odyssey

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