When the Eurozone averted an unceremous Greek exit by the narrowest of margins four weeks ago, anyone with the slightest bit of concern for European unity breathed an almighty sigh of relief. But all they had agreed was to start talking about a third, desperately-needed bailout.
Now, though, there is a glimmer of hope that all that chatter is finally coming to something, as news leaked out over the weekend that Greece was close to agreeing terms with its creditors on an €86bn (£60.8bn) rescue.
Like most Eurozone negotiations, the clock is ticking – the stricken Mediterranean country is due to repay €3.3bn to the European Central Bank on August 20. And again, true to Eurozone form, it’s been pretty brutal: talks apparently lasted until 3.30am this morning.
‘If there aren’t any last-minute obstacles raised by our partners, we can wrap up a deal this week,’ an ever-optimistic Greek official told the FT (off the record, natch).
But there are opportunities a-plenty for said 11th-hour obstacles. Germany is apparently becoming increasingly isolated in its determination to stretch out negotiations in order to squeeze yet more concessions from Greece. Berlin officials have, nonetheless, been floating the idea of doling out another bridge loan to get past the August 20 debt barrier, rather than rush through a deal.
Angela Merkel’s government has an all-important veto, which it will no doubt use (or at least threaten to behind closed doors) if the bailout isn’t strict enough to sell to its sceptical public. At some point, though, Germany will have to give ground, particularly as the IMF is demanding politically-poisonous, but economically necessary, debt relief as the price for its participation.
Meanwhile, Greece’s left-wing Syriza-led government has been fractured by the protracted crisis, quite possibly to the point of no return. And if it falls there will be yet more Greek elections and another government for the Eurozone to negotiate with. The fun doesn’t stop here.