Europe to Greece: Get real

Greek officials find little sympathy from European leaders as the bailout talks grind on.

It was mid-afternoon on Tuesday and a senior member of the Greek government had just awoken from an afternoon nap and come down to the lobby of his Brussels hotel. “I had to get some sleep because I’m pretty wrecked,” the official said.

He’s not the only one who’s tired — as the latest chapter in the seemingly endless Greek economic saga finds governments across the continent increasingly exhausted by Athens’ intransigence.

Earlier that day, the Greek government had submitted a revised list of economic reforms to its European creditors — the second such submission in as many weeks. The European Commission, the International Monetary Fund and the European Central Bank were reviewing the document, but there was an ominous silence.

The Greek government, the institutions say, hasn’t committed to paper the concessions it has promised. Its new proposal was not serious enough and “underestimates the complexity of what is being required from them,” said Eurogroup President Jeroen Dijsselbloem, who took notes at the meeting where Greek Prime Minister Alexis Tsipras and Commission President Jean-Claude Juncker exchanged their competing proposals to end the deadlock.

Even now, going into the fourth month of negotiations over a final €7.2 billion tranche from Greece’s second bailout program, it often sounds like the two sides haven’t been part of the same conversation. “There are a few finance ministers whose patience is running out,” said Finnish Finance Minister Alexander Stubb.

To start the month, Greece exercised a rarely-used IMF facility to buy itself breathing room, bundling its €1.6 billion in June payments to the Fund at the end of the month.

“One just has to compare [Portugal] with another country in Europe unfortunately close to us that instead of making IMF payments early is postponing them,” sneered Portuguese Finance Minister Maria Luís Albuquerque. Her country repaid €6.6 billion of an IMF loan early and is set to repay a further €2.2 billion. “The EU rules apply to everyone. The Greeks have to agree to abide by them,” Albuquerque said.

After many calls between Tsipras and German Chancellor Angela Merkel, as well as a late-night meeting that included French President François Hollande during a summit last month in Riga, Greek officials are clinging to the idea that the chancellor will eventually rescue Greece. Athens appears to be betting on Merkel calculating that a few tenths of a percentage point of primary surplus targets in Greek economic reforms aren’t worth risking the first exit of a member of the single currency.

“Merkel wants a solution, she wants a solution, I’m so convinced,” said a Greek negotiator. “I believe she’s powerful enough and she will impose a deal.”

The Greek side, the official said, has made concessions on primary surplus targets, which are the main sticking point of the negotiations, especially for the IMF.

“We have covered half of the distance, and we expect the others to do their part,” the Greek negotiator said. “But again, I repeat, I do not believe that by any chance we will break [the euro area] up for that kind of distance.”

The rest of Europe takes a different view of Greece’s negotiating tactics.

One eurozone prime minister told POLITICO that Tsipras is negotiating too narrowly. “Tsipras thinks he only needs to convince France and Germany, but 18 countries will have to pick up the bill for Greece,” the prime minister said. The eurozone’s liability in Greece is €242 billion.

Greece’s creditors are terrified that the government still hasn’t woken up to the reality of their negotiations.

“The ball is clearly in the court of the Greek government,” said the Commission’s chief spokesman Margaritis Schinas in a briefing this week.

Asked if there would be a response from the creditors on the latest Greek proposal, one euro area official said, “No! No! There is a proposal and they can provide some idea of how to change that proposal, but not with papers that do not reflect the state of the talks.”

The problem is no longer attributable to personality differences, personified by the bombastic Greek Finance Minister Yanis Varoufakis. Tsipras long ago placed the negotiating emphasis on his mild-mannered, Oxford-educated economist Euclides Tsakalotos, who himself has been camped out in Brussels waiting on a response to Greece’s latest proposals.

Asked what happens now — if Greece will come back with a new proposal or if the European creditors will bring and make a counter-offer — Tsakalotos himself is waiting on news.

“That’s being discussed. I genuinely don’t know,” he said. Reached on his cellphone just as the EU-CELAC summit was beginning on Wednesday afternoon, he added that “I think they’re discussing when and if inside the summit.”

Merkel and Tsipras had just arrived there, and it was clear one was waiting for the other to flinch. They would only meet if the Greeks asked the Germans.

Back in the hotel lobby, the Greek government official is yawning and waiting on a coffee.“Now is the time for politics,” the official said. “The technocrats have done their part. We understand where we agree and where we don’t agree, and now is the time for the politicians to do the final give-and-take.”