Greece inches closer to deal

Cape Breton Post - - WORLD - ATHENS

Greece moved closer on Sun­day to a des­per­ately needed deal with Euro­pean cred­i­tors which would stave off im­me­di­ate fi­nan­cial col­lapse and the coun­try’s po­ten­tial exit from the euro but im­pose more hard­ship on its peo­ple.

Fac­ing a self-im­posed Sun­day dead­line, the eu­ro­zone’s top of­fi­cial, Jeroen Di­js­sel­bloem, said the sides have “come a long way” af­ter two days of talks among fi­nance min­is­ters, but that the fi­nal ef­fort on “some big is­sues” would be han­dled by eu­ro­zone lead­ers in a sum­mit which was ex­pected to go into the night.

Un­der­scor­ing the op­ti­mism de­spite the of­ten fun­da­men­tal dif­fer­ences among the lead­ers, Ital­ian Prime Min­is­ter Mat­teo Renzi said “we are very close.”

The broad out­line of a deal ap­peared to con­sist of a long se­ries com­mit­ments from Greek Prime Min­is­ter Alexis Tsipras to push through much of a dras­tic aus­ter­ity pro­gram within days, while the 18 other eu­ro­zone lead­ers would com­mit to start talks on a new bailout pro­gram.

In a four-page draft pro­posal put to eu­ro­zone lead­ers and ob­tained by The As­so­ci­ated Press, lan­guage up for dis­cus­sion spoke of a po­ten­tial “time out from the euro area” for Greece if no agree­ment could be found.

It high­lighted the in­creas­ing frus­tra­tion with Greece dur­ing five months of fruit­less talks. On Sun­day, doubts on the Greek gov­ern­ment’s com­mit­ment to im­ple­ment tough mea­sures con­tin­ued.

“The most im­por­tant cur­rency has been lost: that is trust and re­li­a­bil­ity,” said Ger­man Chan­cel­lor An­gela Merkel, re­flect­ing on five months of tor­tu­ous ne­go­ti­a­tions with Athens.

In the draft doc­u­ment, Greece com­mit­ted it­self to push­ing a first set of mea­sures through par­lia­ment by Wed­nes­day. De­spite the sting­ing con­di­tions on pen­sion, mar­ket and pri­va­ti­za­tion re­forms, Tsipras in­sisted his gov­ern­ment was ready to clinch a deal.

“We owe that to the peo­ples of Europe who want Europe united and not di­vided,” he said. “We can reach an agree­ment tonight if all par­ties want it.”

Greece has asked Europe’s bailout fund for a 53.5 bil­lioneuro ($59.5 bil­lion) 3-year fi­nan­cial pack­age but many of­fi­cials in Brus­sels say the fig­ure will have to be much higher and in­sist on tough Greek aus­ter­ity mea­sures. This would be Greece’s third bailout in five years.

Greece des­per­ately needs help to avoid a fi­nan­cial col­lapse. The econ­omy is in freefall and the coun­try faces big debt re­pay­ments in the com­ing weeks. Greek banks have been shut­tered for the best part of two weeks and daily with­drawals from ATMs have been lim­ited to a pal­try 60 eu­ros ($67).

The banks, ac­cord­ing to some ac­counts, have barely enough cash to last through the week.

Merkel, how­ever, in­sisted that Ger­many would not sway from its stance that Greece needs to do much more to get any help just to save its po­si­tion in the 19na­tion eu­ro­zone.

“There will not an agree­ment at all costs,” she said, com­ing into Sun­day’s sum­mit meet­ing. “Nerves are tense.”

High­light­ing the dif­fer­ences within the cred­i­tors’ camp, French Pres­i­dent Fran­cois Hol­lande in­sisted it was vi­tal to keep Greece in the cur­rency club and avoid a so-called “Grexit.”

If Greece had to leave the euro cur­rency “it’s Europe that would go back­ward,” Hol­lande said. “And that I do not want.”

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