The situation in Greece continues to worsen, with the struggling nation at real risk of cash running out by April 20 unless a new solution is found. According to a report from Reuters, the situation is getting desperate as Greek leaders meet with key EU leaders in the hope of unlocking new aid. With possible new reforms, cash injections, and a messy default all on the table, the world’s markets lie in wait as European leaders hope to broker a new deal by early next week.
Key Euro zone creditors are considering a new financial lifeline for the struggling nation, with Greek prime minister Alexis Tsipras reportedly saying a deal needs to happen sooner rather than later. In a three-hour meeting in Brussels last Friday, Tsipras informed his creditors that if they wait until the end of April before releasing funds, it will be too late for Greece. German Chancellor Angela Merkel, a key figure in the talks, also said “Time is short,” according to party allies.
The current terms of the bailout have 7.2 billion Euros in rescue funds distributed to Greece at the end of April, on condition of evidence that the new left-wing Greek government are committed to the austerity cause. However, this timeline is not urgent enough according to Tsipras, who requested a meeting with the leaders of Greece’s key creditors, including Merkel and Mario Draghi, the president of the European Central Bank.
According to Eurogroup chairman Jeroen Dijsselbloem, who is also the Dutch finance minister, in a message to RTL Nieuws television, “That process is moving once again, I say with some cautious satisfaction. Now there’s hard work happening on complementary additions to the (reform) list… That they’re all but broke, we knew already… But my message to the Greeks is then every time again: So then, work with us as quickly as possible on an adjustment to the program.”
Athens are hoping for the return of about 1.9 billion Euros in profits made by the European Central Bank on Greek bonds, along with about 1.2 billion Euros in cash left in the Greek bank bailout fund. Greece argues that its own bank rescue fund should have returned only 9.7 billion Euros to the Euro zone, 1.2 billion Euros less than the 10.9 billion Euros taken back by the Euro zone last month. Euro zone officials are discussing the bailout fund on Wednesday, with Greece already having received two bailouts totalling 240 billion Euros since 2010.
The Greek economy continues to shrink in reaction to austerity measures imposed by lenders, with the economy 25 percent down since austerity measures were first put in place. With one in four Greeks now out of work and more than 50 percent of young people unemployed, reforms are a tricky issue for Tsipras, a left-wing leader who came into power in January pledging to end austerity policies. Tsipras is expected to deliver a detailed blueprint of new reform proposals within 10 days, with markets around the world waiting with bated breath.