Extension offer for Greece

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So Greece’s creditors are insisting that Greece gives in on the key sticking points in negotiations:  pension and labourr market “reform. It’s hard to know what to make of how the creditors are handling this given that Greek Prime Minister Alexis Tsipras has told them in no uncertain terms that these are the red lines and he’s not budging.

But now they have put even more pressure on Greece with The Wall Street Journal telling us that they are now talking about extending country’s bailout program through to March 2016. It’s all offered on the condition that Greece makes those painful choices.

The eurozone’s portion of Greece’s €245 billion ($276 billion) rescue program runs out at the end of June, raising questions over how Athens will pay off its debt beyond this month and remain in Europe’s currency union.

The measures are said to have been discussed last week at a meeting of European Commission President, Jean-Claude Juncker, and Greek Prime Minister, Alexis Tsipras. Despite this, talks at the moment remain deadlocked.

What it does mean is that this drama will drag on until next year, and maybe beyond.

Tsipras is playing hard ball. As a he says in this interview, the world can’t afford Greece to leave the Eurozone.

“If Europe’s political leadership is unable to handle a problem like Greece, which represents 2% of its economy, how will the markets react for countries with much bigger problems, such as Spain and Italy with its public debt of €2,000 billion?,’’ he says. “If Greece goes under, the markets will immediately seek out the next one. If negotiations should collapse, the cost to European taxpayers will be huge.”

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