World Economy

Progress in Greek Debt Talks

Progress in Greek Debt TalksProgress in Greek Debt Talks

Greece and its European creditors are finally making progress only days after combative Finance Minister Yanis Varoufakis was effectively sidelined from talks on its enormous debt, EU sources told AFP.

Negotiators said there were “encouraging” signs from meetings over the weekend in Brussels on reforms which Athens must push through in exchange for 7.2 billion euros ($8 billion) in desperately-needed bailout funds.

The talks, which began Thursday, were the first led by economist and junior foreign minister Euclid Tsakalotos, who last week replaced the controversial Varoufakis as head of Greece’s team of negotiators.

After months of acrimonious deadlock, “the revamped (Greek) Brussels group have clearly improved the process, with a clear schedule for the discussions... and with more experts present with more details,” one source said.

“Talks are constructive,” the source added. “I would even dare to say encouraging.” They will continue on Monday and could last until at least Wednesday, “which is a good sign”, the source said.

Varoufakis had a notoriously difficult relationship with his country’s lenders, and was reportedly “isolated” by his fellow European finance ministers after a stormy meeting in Riga two weeks ago.

  Convergence on Some Issues

A second EU source confirmed there had been “convergence on some issues” during talks over the weekend, though “more work was needed on others” when the teams sit down again on Monday.

Greece’s semi-official ANA news agency also reported progress and an improved atmosphere in talks.

Varoufakis has insisted however that he is still in charge of Greece’s overall handling of the talks.

“Yes, I’m in charge. I’m still responsible for the talks with the Eurogroup,” he told the weekly Die Zeit on Thursday.

Discussions between Athens and its creditors are hung up in particular on cuts to pensions and deregulation of the labor market, a difficult pill to swallow for Prime Minister Alexis Tsipras’s radical government that was elected four months ago promising to end years of austerity that has ravaged the economy.

Varoufakis claimed on Saturday that Greece could manage without a new “loan” if its debt was restructured.

Asked if it could do without bailout funds, Varoufakis told the Efimerida ton Sindakton daily: “Of course it can. One of the conditions for this to happen though, is an important restructuring of the debt.”

He also took a swipe at the eurozone, warning that if it “doesn’t change it will die”, adding that “no country, not only Greece, should have joined such a shaky common monetary system.”

Nevertheless, he said it was “one thing to say we shouldn’t have joined the euro and it is another to say that we have to leave” because backtracking now would lead to “a unforeseen negative situation”.