Greece is nearing financial collapse and the country's leaders are searching for political solution to stave off bankruptcy. While most of Europe and its creditors are standing firm on demands for fiscal reform, Athens, luckily has found an ally in the United States.
Washington has been floating the possibility of allowing the Greeks some flexibility. U.S. officials are fearful that allowing Greece to slide into deeper recession will make a deep impact on the global economy.
"U.S. policy makers are clearly more fearful of a Greek default's impact on the global economy," The Wall Street Journal reported.
No budging down
But the Eurozone and the International Monetary Fund (IMF) are ceding not even an inch. As top creditors by Athens, they adamantly push for the current Greek government to take the bitter pill of reforms before expecting some slack. A deal is likely, which means financial aid is forthcoming for Greece to fund its repayment duties, but it hinges on specific conditions.
Labor and pension restructurings have been the constant demand coming from numerous creditors but the socialist Greek government appears strongly oppose to economic measures that contradict its election promises, Reuters said in a report. The subject is one of the sticking points in the ongoing talks between Greece and its creditors, likely the main cause why a deal is yet to be finalized, the same report added.
Political solution
Meanwhile, Greek Prime Minister Alexis Tsipras is convinced that his country's financial problems require a political solution, specifically to be extended by France, Germany, key Euro nations and the IMF. Tsipras has been working to end the negotiations quick and provide aid to Athens but creditors insist first on the introduction of reforms.
The Eurozone and the IMF, however, are not inclined to bend the rule for Greece despite the grim picture for the world economy that the U.S. has been harping about in case of a Greek default. The suggestion from Euro leaders is: Washington may want to back its sympathy for Athens with some cash grants.
The IMF is set to collect around 300 million euros from Greece this coming June 5 but it remains a mystery if the country can beat the deadline. As insinuated by the creditors, the U.S., perhaps, can get Greece started by taking over some of its debts.
