The European Commission is busily denying its boss Jean Claude Junker has come up with a plan to keep the Greeks sweet and inside the euro.
Junker’s plan is believed to impose a slightly more generous repayment plan for Greece’s mammoth debts, which Athens insists are too big to allow the economy to recover.
“It does look as though
we’re getting towards an ultimatum which perhaps will force the issue as far as the two sides are concerned,” said head of strategy at CIB, Jeremy Stretch.
The news sent Greek bonds tumbling, as investors took the view Greece was too busy firefighting and keeping voters happy than wanting to plough on with vital economic reforms.
“It’s clearly in the interests of both Greece and euro area as a whole to reach an agreement. The only scenario that we consider in the Commission is Greece in the euro zone, a strong Greece in a strong euro zone,” said the EU’s Economic and Monetary Affairs
Copmmissioner Pierre Moscovici.
The government promises to do all it can to soften austerity for the majority, but some observers claim Syriza is actually going back on some much-needed reforms as it struggles to keep its electorate happy.