Hot Decameron: Full speed ahead for a soln to Greece’s finance woes by end of May

European Commission (EC) President Jean-Claude Juncker’s proposal is a focal point of backstage negotiations surrounding Greece regardless of denials that it exists. There is a rush against time to ensure that the Radical Left Coalition (SYRIZA) government of Greece has enough money in its coffers to pay its installment to the International Monetary Fund (IMF) on June 5.

The next ten days are crucial with reforms to VAT being a thorny issue ahead of talks on the sidelines of the European Council of EU leaders on Thursday and Friday. During this meeting in Riga, Latvia, Prime Minister Alexis Tsipras will meet with German Chancellor Angela Merkel and French President Francois Hollande.

Merkel and Hollande met in Berlin on Tuesday, ahead of the talks in Latvia, and urged for faster progress between Greece and its international creditors from the EC, European Central Bank and IMF.  Both leaders stressed that time was of the essence with Merkel stating that it was necessary to speed up talks as the current program ends at the end of June. “We are all interested in a completion by the end of May,” she said, adding that this would be raised with Tsipras face-to-face.

Hollande, on his part, said that there is agreement that Greece must stay in the eurozone but stressed that a long-term solution was needed to end the current state of insecurity. He pointed to Greece’s urgent financing needs.

On Tuesday, government circles noted that Tsipras wants to secure a single agreement with its EU partners and a non paper was issued with this goal. His speech at the annual general meeting of the Hellenic Federation of Enterprises (SEV) on Monday had pointed to Greece’s need for more than just “short-term funding breathing room” but will aim at dealing with the public sector’s “medium and long-term funding problem until we can safely return to the markets.”

Ideally, the government wants to achieve a deal that would end austerity, restore liquidity in the real economy and open the country’s potential for growth.