Greek crisis: Another deadline missed in chaotic, never-ending endgame

A deepening sense of crisis is characterising the Greek saga, especially after the last, chaotic 48 hours.

Following Monday's emergency eurogroup and euro zone summit in Brussels, Greek prime minister Alexis Tsipras arrived at the European Commission buildings in Brussels at lunchtime on Wednesday for high-level discussions with IMF managing director Christine Lagarde, ECB president Mario Draghi and other senior EU officials.

Across the road, euro zone finance ministers, including Michael Noonan, were gathering for a eurogroup meeting at 7pm.

By late afternoon it was becoming clear that there was in fact no proposal to discuss. The eurogroup met for less than an hour and settled on a deadline of 11am the following day for negotiators to present a new proposal.

Finance ministers agreed to stay overnight in Brussels and reconvene at 1pm yesterday.

Familiar pattern

The depressingly familiar pattern of missed deadlines repeated itself yesterday. Tsipras returned to the commission at 9am but the 11am deadline came and went.

At 1.30pm the fourth eurogroup in less than a week began, with two competing proposals on the table. It broke up three hours later, with finance ministers making a tentative plan to meet again tomorrow.

Meanwhile, Tsipras joined EU leaders at the European Council in the adjacent building. While he was pushing to put Greece on the agenda at the EU summit last night, German chancellor Angela Merkel and others were keen to keep discussion of the Greek crisis within the realm of the eurogroup.

Officially, negotiations will now continue between officials representing the three creditor institutions and the Greek government today in Brussels. But the real decisions are likely to be made in Athens. Tsipras is trapped between the demands of the troika and the euro zone member states it represents, and his own party and public.

Next step

How far he is prepared to go to secure a deal remains to be seen. Despite the continuing wrangling over details, ultimately the next step will be a political decision for the Greek government.

Tsipras phoned the Greek president, Prokopis Pavlopoulos, yesterday afternoon ahead of the summit to brief him on the negotiations. This prompted some speculation that the Greek leader was considering calling a general election.

Rumours also swirled yesterday that creditors were trying to stir divisions in the Greek government, and even instigate the demise of the Syriza-led government. This was fuelled in part by the fact that the main Greek opposition leaders were also in Brussels, with former prime minister Antonis Samaras attending the pre-summit meeting of the European People's Party.

As the Greek crisis approaches endgame, another missed deadline has left officials on all sides of the table exasperated. But technically Greece still has time before Tuesday, when a payment of just under €1.6 billion to the IMF falls due and its bailout expires.

Reform proposal

The choreography of the coming days could see officials continue to work on the reform proposal today before putting it to finance ministers tomorrow Brussels.

Should the deal be approved, the Greek parliament is likely to debate and vote on the matter on Sunday. The German Bundestag and other parliaments could then consider the proposal on Monday.

Arguably the expiration of Greece’s bailout programme on Tuesday may be more problematic than failure to meet the IMF repayment.

There are reports that profits held by the ECB on Greek bonds (the so-called SMP bonds) could be used to make the IMF payment.

Still, the expiration of the Greek bailout could trigger the ECB to halt its emergency liquidity provision to Greek banks, as Greece would no longer be technically in a bailout.