Greece pushes to reopen bailout talks
Despite triumphing in a popular vote against austerity, Greece on Monday faced the urgent need to heal its ties with European creditors and reach a financial rescue deal that might prevent it from falling out of the euro — possibly within days.
Prime Minister Alexis Tsipras won big in Sunday’s referendum, in which 60 per cent of Greeks rejected the economic measures creditors had proposed in exchange for loans the country needs to remain afloat. He also received the rare backing of opposition parties to restart bailout negotiations.
But his bolstered mandate to push for better concessions from creditors hit the hard reality of the country’s deteriorating finances, with the banks facing the risk of collapse within days unless a rescue deal is reached. In a sign that he hopes to reach a deal as soon as possible, Tsipras appointed a new mild-mannered finance minister to lead talks with bailout creditors and replace Yanis Varoufakis, the hard-talking professor who clashed regularly with his European counterparts.
Euclid Tsakalotos, a 55-yearold economist, appears more willing to reach a compromise with creditors and will be tested as soon as Tuesday, when he will meet the other 18 eurozone finance ministers in Brussels.
That meeting is meant to seek the basis for a deal that European leaders, including Tsipras, might discuss at an emergency summit later in the day.
Ahead of the summit, Tsipras spoke by phone with German Chancellor Angela Merkel.
Greece’s financial situation is getting more difficult by the day. It had to close the banks last week to prevent their collapse in the face of a run, and imposed limits on cash withdrawals and transfers. Greek banks remained closed Monday, with only a few branches opening for pensioners to receive emergency assistance.
The government is expected to extend the restrictions on withdrawals after the European Central Bank makes a decision later Monday on cash support for Greek banks. The ECB has frozen the amount of credit it allows Greek banks to draw on, even though their cash requirements are growing as people rush to withdraw what money they can. Analysts say if the ECB keeps the amount of credit on hold, Greek banks will come under increasing pressure and the government could have to make the limits on cash withdrawals even tougher.
Elderly people argue with a bank worker as they wait to be allowed into a bank to withdraw a maximum of 120 euros ($134) for the week in Athens, Monday.