Tuesday, June 2, 2015

Spoiler alert: Greece won’t default. Not this week, at least.

by Matthew Karnitschnig


June 1, 2015

As Athens faces a Friday deadline to repay €301 million to the International Monetary Fund, the world is again on tenterhooks, waiting to see whether Greece wins another reprieve.

The spoiler answer is “yes.” After five years of rescue operations and hundreds of billions in aid, Europe is simply too vested in Greece to pull the plug now.

So the real question isn’t whether Greece gets a short-term lifeline this week, but what comes after. Athens may win enough money to get through June, but it will immediately need to secure a whole new bailout agreement to continue pay off its credit — far from a sure thing.

Europe’s heavyweights, in Berlin for a conference Monday, huddled at Angela Merkel’s chancellery late into the evening to craft a joint offer that could break the stalemate with Greek Prime Minister Alexis Tsipras. The group included French President François Hollande, ECB President Mario Draghi, IMF chief Christine Lagarde and European Commission President Jean-Claude Juncker. Lagarde and Draghi were surprise additions.

It “could well be that this is the most important evening in the last months,” a senior source said.


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