If Europe is finally coming to a moment of reckoning in the Greek debt crisis — a standoff now rattling financial markets and threatening European unity — then the critical meeting apparently occurred late Monday night, when Chancellor Angela Merkel of Germany summoned critical players to an emergency summit meeting in Berlin. Everyone was invited, except Greece.
This was not a big surprise, since those invited were Greece's creditors, who were in effect trying to form a united front against Athens and speed up the debt talks before a payment due on Friday. But the list of attendees symbolized how Greece's far-left government had become very much alone politically, analysts said, and how its promise to roll back the German-led policies of economic austerity had encountered an unexpectedly unified European opposition.
"There was a window of opportunity to change course," said Paul De Grauwe, a professor at the London School of Economics and Political Science who is a critic of austerity. "But somehow the northern view — of Germany, Holland and Finland — has prevailed. Why was this? That is where the power is. The power of the purse."
After months of slogging negotiations, some sort of deal must be struck by the end of June — the bailout program for Greece ends on the 30th — but how it will end remains unclear. The impasse is rooted in the refusal of Greece's creditors — the International Monetary Fund, the European Central Bank and the European Commission — to release a final installment of bailout funds — 7.2 billion euros, or about $8 billion — without an agreement from Athens on budget cuts and economic changes.
The Greek government has warned that it could run out of money this month and fail to make loan payments to creditors, thereby plunging into default. Many analysts say that Greece might be forced to abandon the euro.