The Greek saga probably enters its decisive moment. Last week no real progress was made in the talks. Formal and informal talks in many formats did not manage to get over the differences. The EU and the IMF want more budget cuts and mainly pension cuts, while for Greece this is a red line. In addition, the Greek constitutional court ruled last week that the earlier pension cuts were illegal, thus reversing one of the key reforms. Negotiators and politicians are losing patience with the Greeks, whom they accuse of lying and telling different things to different audiences. Also the German populace, for example, would like the Greeks to rather leave the euro. The frustrated IMF negotiators even left the talks altogether and flew back to New York. On Friday, the eurozone finance ministries´ experts debated the implications of a Greek default – sending the clearest possible signal. The only optimistic ones seem to be the Greek politicians, who see progress after each meeting (routinely denied by the creditors) and hope for a quick resolution. PM Tsipras is believed to have told his government to be ready for a tough compromise. One of the Greek proposals may be tough reforms, even beyond some Greek red lines, in exchange for debt cuts. Debt cuts are, however, non-negotiable for Germany. This week´s eurozone meeting may be the last chance to get things done. The German and the Finnish parliament, at the least, have to approve the disbursement of the final bailout tranche to Athens – such procedures require some time. If deal is not reached at the Eurogroup meeting, it is likely that Greece will not be able to pay the bundled IMF repayment at the end of June – meaning default and a very unpredictable future.

For more, click here and here.