Greece’s creditors hold secret talks in Berlin as time runs out for a near-term agreement.
European leaders met in Berlin late Monday to hash out a last minute deal to keep Greece from defaulting as it faces a series of deadlines for debt payments.
The high-ranking group included German Chancellor Angela Merkel, French President François Hollande as well as the heads of the European Central Bank, the International Monetary Fund and the European Commission.
Merkel organized the surprise gathering in her Berlin offices in a bid to resolve the Greek crisis ahead of the G7 meeting she is hosting in Bavaria over the weekend. Europe’s leaders have come under renewed pressure in recent days from Washington to craft a quick solution to the Greek crisis, which has continued to roil global markets.
“Merkel doesn’t want her weekend to be spoiled,” a source close to the chancellor said.
Participants in Monday’s meeting reached a broad consensus on the need to extend Greece short-term aid without relaxing demands for further economic reforms, people familiar with the talks said. There was some disagreement between the IMF and the European side on the details, however, they said.
The group agreed to maintain demands on Greece for the disbursement of the final, €7.2 billion tranche of its last bailout, the officials said. Those demands center around pension and labor market reforms as well as continued privatizations.
The bigger issue Monday was how to keep Greece afloat in the medium term. Greece remains locked out of international capital markets and will need a fresh bailout to continue to pay its bills. But that could take months to negotiate.
“The question is how to bridge the summer,” one senior aide present at the Berlin meeting said.
The disbursement of the next tranche would only give Greece a few weeks of breathing room. One option under consideration Monday was to find a way to extend the current program through the summer, which could give the parties more time to negotiate a new bailout.
The group didn’t call Greek Prime Minister Alexis Tsipras, who was in Athens at a party gathering. The group aims to finalize its joint proposal and hand it over to the Greek government in confidentiality by the end of this week. Leaders agreed that talks had to be “intensified”, a German government spokesman said after the end of talks.
He said: “The participants in the talks were in close contact in recent days and want this to remain the case in the coming days, both among themselves and of course with the Greek government.”
