Talks seeking to end the impasse between Greece and its lenders tumbled down over the weekend with European leaders expressing their disappointment at Athens for failing to come up with any concessions that would have allowed for the release of the desperately needed financial aid. Greece was hoping to secure a $ 1.8 billion funding it needs to pay money owed to the International Monetary Fund before the end of June.
Greek Prime Minister Alexis Tsipras had earlier indicated that his country was willing to accept painful concessions and reforms in return for debt relief. However, the European Central Bank, which was also involved in the talks, said “Greek’s proposals were still incomplete”
Greece said it was still willing to talk, but officials from the European Union and the IMF said they had no authority to take the negotiations any further. Nonetheless, Athens remains adamant that it will never give in to some of EU’s and IMF demands such as more wages and pension cuts.
The European’s Union Executive Commission said that following the talk’s collapse, Euro Zone finance ministers will now take up the matter. With no signs of a deal being agreed upon anytime soon, the ministers will have to contemplate on Athen’s future as a member of the Euro Zone.
The decision to strip Greece of its Euro Zone membership after years of grueling negations and two bailouts totaling to 240 billion Euros will plunge the country into an unknown economic future and deal a huge blow to European Union’s most ambitious undertaking.
Significant progress was made, but the talks failed to bridge the gap between plans by authorities in Athens and joint demands by the European Union, the European Central Bank, and the IMF. The organizations demanded that Greece cut up to 2 billion Euros off its annual budgetary allocations.
While Greece showed the willingness to reduce its budgetary allocations, it did not precisely indicate how it intended to do so. It is this lack of commitment that EU’s official’s term as “nothing new” and raised questions about Athens dedication to the bailout process.
Even if the current standoff is overcome, Athens still faces an uphill task to repay all the bailout for a very long time and it is expected that this will have a negative impact on the economy for decades. However, an immediate deal between Greece and its lenders is paramount if the country is ever going to get on a path to recovery.