Down to the wire

Greek finance minister Euclid Tsakalotos on Monday offered a new timeline for the conclusion of Greece’s current review: the first round of the French presidential election on April 23.

Speaking after the Brussels Eurogroup meeting, he said he, his deputy and labour minister Efi Achtsioglou would remain in Brussels to resolve the last remaining issues: labour reform and pensions. Greece has been resisting another cut to pensions spending and a stiffening of labour laws to allow mass layoffs and restrict the right to strike.

“Our strategy is to remain here, make substantial progress, and leave very few issues, if possible none at all, to have the institutions return to Athens and have a deal, a package of measures, we will have agreed upon before the April 7 Eurogroup in Malta,” said Tsakalotos. “After that I think the process can speed up even more and we can go to the International Monetary Fund’s spring meetings in April (21-23) to seal the final details.” 

The French election will likely see a shift to conservative government, since the frontrunners, the Front National’s Marine Le Pen and the centrist Emmanuel Macron, are running well ahead of socialist candidate Benoit Hamon. Any such government is likely to be less sympathetic to the Greek plight than current socialist president Francois Hollande.

The fact that the Greek side wants to take negotiations down to that particular wire suggests three things; first, Tsakalotos and premier Alexis Tsipras have decided to make a show of being tough on creditors; second, they need time to rally their MPs’ support behind unpopular measures, particularly for the left; third, they are reluctant executors of this particular round of reform, and want that to be abundantly clear.

Eurogroup chairman Jeroen Dijsselbloem confirmed the intensification of talks on “key issues” in Brussels this week but warned that, “there is no promise that all the work will be done by [April 7], but there is a strong agreement and a strong will between all parties involved.”

A Bloomberg analysis on Monday pointed out the danger of Greece slipping into another prolonged period of negotiation until it defaults on its creditors, as happened in June 2015.