Greece back on the agenda as EU frustration grows with lack of progress

Greece returns to the EU political agenda this week as prime minister Alexis Tsipras travels to Brussels for a two-day summit of EU leaders. Almost two months since the Greek election, the country’s financial status remains precarious. Despite winning a four-month reprieve from euro-zone finance ministers last month, Greece must come up with new reform measures to satisfy its international creditors.

An initial April deadline is already built into the eurogroup agreement outlining the bailout extension, but Greece faces a number of debt-repayment cliffs before then. At the moment it is unclear whether the country has the funds to meet its bills as they fall due.

EU economics commissioner Pierre Moscovici yesterday reiterated the European Commission’s commitment to keeping Greece in the euro. “The single currency has to be perpetual. As soon as one leaves the question is ‘who’s next?’” he said.

But behind the scenes, patience is running thin for Tsipras and his government.

Frustration

Official discussions between Athens and representatives from the three creditor institutions began last week. But euro-zone officials are voicing increasing frustration, with reports that troika officials – including Irish man Declan Costello, who is leading the European Commission team negotiating with Greece – are finding it difficult to access information from Athens.

A leaked European Commission letter from Costello, apparently demanding the Greek government withdraw planned legislation, has also sparked tensions, with Tsipras telling the Greek parliament yesterday that he would “not be frightened” by EU lenders.

As with last month’s summit, Tsipras has urged the European Council to put the Greek issue on the agenda, requesting a five-way meeting with Francois Hollande and others on the margins of the summit. European Council president Donald Tusk is against the idea, while it remains to be seen if Tspiras has the support of other EU leaders to push the issue on to the agenda.

The Syriza-led government has been rapidly losing friends across Europe. The anti-German rhetoric emanating from Athens has been badly received.

Similarly, the bemused scepticism that characterised euro-zone finance ministers’ attitude to Greek counterpart Yanis Varoufakis is giving way to more deep-seated exasperation at the apparent lack of progress made by Greece.

Minister for Finance Michael Noonan sparked annoyance when he suggested in Brussels that the office of Greece’s deputy prime minister, rather than Varoufakis, would be leading negotiations with the institutions, a system akin to the Irish bailout model where the Economic Management Council was the main contact point for the troika.

His comments were met with a terse statement from Athens, which said that Varoufakis continued to represent Greece in the eurogroup, though it ignored the core of Noonan’s comments – namely, who would be representing Athens in negotiations with its lenders.

Greece has been losing political capital in other ways. Taoiseach Enda Kenny may have been pictured talking politely to the new Greek prime minister in February, but incumbent governments are not going to take kindly to the Greek government taking sides in domestic politics, whether through pre-election jaunts with Sinn Féin or pictures of Tsipras hugging Podemos leader Pablo Iglesias at a pre-election rally.

Internal politics

Virtually all EU member states were careful to state that they did not want to interfere with Greek internal politics when they congratulated Tsipras on his victory in January. The message seems to be that Greece should similarly keep out of other countries’ domestic political affairs. The decision to actively court opposition parties in a number of member states shows political misjudgment by the new Greek government – after all, Varoufakis needs the political goodwill of the eurogroup of finance ministers to back any renegotiated bailout deal, not the support of would-be cabinet ministers.

Nonetheless, Greece’s strategy to play tough with its EU partners is a gamble that could pay off. After all, European partners have indicated that they want to prevent a Grexit at all costs, despite the reduced contagion risk.

The looming presence of Russia as a possible alternative source of finance for Greece is also a pressing concern. News that Tspiras will visit Angela Merkel in Berlin on Monday was quickly followed by confirmation that he will meet Vladamir Putin in Moscow on April 8th, a month earlier than planned. Ultimately, the shadow of Russia may be the catalyst for Greece getting its way.