Expectations that Greece could win some leeway from international creditors at an EU summit were dashed yesterday as the leaders of France and Germany ruled out any further aid for Greece unless further reform measures are agreed.
Speaking following a late-night meeting with Greek prime minister Alexis Tsipras on Thursday night German chancellor Angela Merkel said that greater efforts were needed from Greece to unlock up to €7.2 billion of bailout funds that have been withheld by lenders. It comes amid reports that the IMF is becoming increasingly hardline in its approach to Greece in the ongoing bailout talks. The Greek prime minister held a two-hour meeting with German chancellor Angela Merkel and French president Francois Hollande late on Thursday night on the fringes of the Eastern Partnership Summit in Riga.
But attempts by Mr Tsipras to progress the bailout negotiations at prime ministerial level yielded little in terms of concrete results, with the German chancellor noting yesterday that further work has to be done “with the three institutions,” a reference to the troika of lenders, including the IMF, which are leading negotiations with Greek officials in Brussels.
While Mr Tsipras was keen to elevate the Greek issue to leaders' level at the summit, EU heads of state appeared more pre-occupied by the threat of a possible British exit from the European Union rather than the recurring problems in Greece, as British prime minister David Cameron met EU counterparts for the first time since his election victory two weeks ago.
Bilateral meetings
Mr Cameron opened discussions on a possible reform package for Britain on the margins of the two-day summit, with a series of bilateral meetings planned in the coming weeks, including talks with Taoiseach Enda Kenny.
Separately, Mr Tsipras met with European Commission president Jean-Claude Juncker at the end of the summit yesterday. The head of the EU's executive arm, who was centrally involved in the two Greek bailouts as head of the eurogroup for ten years, is playing a key role in the Greek discussions.
In a sign of possible divisions between the commission and member states such as Germany and France on the Greek bailout, the former Luxembourg premier said in an interview on Thursday that the single currency was “not just about monetary policy . . . but also the dignity of the Greeks”.
"You can not just throw a country out from the monetary union", he said in an interview with German business weekly Wirtschaftswoche.
His comments reflect a growing perception that the European Commission is taking a less hardline stance than the other two members of the Troika and creditor countries like Germany. Earlier this week, German finance minister Wolfgang Schauble said he could not rule out Greece becoming insolvent as the stand-off between Greece and its international lenders about a new reform plan continues.
Greece faces repayments of €1.5 billion to the IMF in June, including a €305 million payment on June 5th. Greek finance minister Yanis Varoufakis warned earlier this week that Greece may be forced to prioritise the country's wage and pension bills ahead of its loan repayments should no bailout cash be released.
Fresh reform plan
Negotiations are ongoing in Brussels on a fresh reform plan, with representatives from the European Commission, IMF and ECB pushing for tougher pension and labour market reforms from Greece.
Mr Varoufakis, who was last month dropped from the Greek negotiating team, provoked further controversy this week after revealing in an interview with the New York Times Magazine that he had taped a eurogroup meeting of finance ministers, though he said he would not make the contents of the recording public.
