Time is running out for Greece to reach a deal with bailout creditors and prevent the country going bankrupt, the eurozone's top official said Friday as he headed into discussions with his colleagues from the 19-country single currency zone.
Though he downplayed any expectations that a deal would be secured at the meeting in the Latvian capital of Riga, Jeroen Dijsselbloem says there's a "great sense of urgency" from all sides to get a deal done. He said it's particularly important for Athens that a deal is secured soon so the country can get the financial support it needs "to make sure there's enough money available to keep the government running."
Greece had an end-of-April date to agree to more reforms in exchange for rescue money its creditors had set aside. Without the money, Greece faces potential bankruptcy and a possible exit from the euro, a development that many in global policy making circles feel could damage the world's economic recovery.
For weeks, the meeting in Riga was expected to be the one where Greece's immediate financial future would be sorted out. Greece's left-wing government, elected in January on a mandate to bring crippling austerity to an end, would present its reform plans to its creditors in the euro-zone. If all worked out as planned, Greece would be handed the remaining money available in its bailout program — 7.2 billion euros ($7.7 billion U.S.) — to pay off upcoming debts to its creditors in the euro-zone and the International Monetary Fund.
Creditors have demanded reforms that include sweeping changes to pensions and labor rules. But the Greek government has ruled out many key demands, arguing it was elected to end the kind of stifling budget austerity that contributed to a 25% contraction in the economy. Its focus is geared far more on fighting corruption and increasing its tax take than more cuts.
After weeks of tortuous discussions that have yielded little besides distrust, Greek Finance Minister Yanis Varoufakis is not expected to present any reform plans at the meeting.
