Greek rescue deal likely
Prime Minister Alexis Tsipras may have averted a financial meltdown of his country’s economy, after eurozone leaders seemed committed for a last-minute rescue for Greece.
“The ball is in Greece’s court,” Italian Prime Minister Matteo Renzi said. “Next Sunday the final meeting will take place on Greece.”
German Chancellor Angela Merkel changed her tune in the room and was actively involved in efforts to find a lastditch solution for a new Greek loan application and reforms, according to euro zone sources.
“It is not a matter of weeks but of a few days” to save Greece from collapse, Merkel told reporters.
With Greek banks down to their last few days of cash and the European Central Bank tightening the noose on their funding, Tsipras tried to convince the euro zone’s other 18 leaders to approve a new loan swiftly.
ECB President Mario Draghi had assured finance ministers at the Eurogroup meeting that the central bank would keep Greek lenders afloat this week as long as negotiations were under way.
Merkel and French President Francois Hollande worked together on a plan to save Greece from plunging into economic turmoil and possibly having to ditch the euro. This involved a medium-term conditional programme and a short-term interim financing deal for a few months, sources said.
However, a solution still depends on Tsipras putting forward convincing reform proposals and rushing key measures through parliament by the weekend to make Greece’s public finances sustainable.
If he does, bridge financing could be provided by “Greece’s friends” and by releasing past ECB profits on Greek bonds, to prevent Athens from missing a crucial 3.5 bln euro bond redemption to the ECB on July 20.
Merkel made it clear it was up to Tsipras to present convincing proposals after Athens spurned tax rises, spending cuts and pension and labour reforms that were on the table before its 240 bln euro bailout expired last week.
Euro zone finance ministers complained that their new Greek colleague Euclid Tsakalotos, while more courteous than his abrasive predecessor Yanis Varoufakis, had brought no new proposals to a preparatory meeting before the summit.
Greek officials said the leftist government broadly repeated a reform plan Tsipras sent to the euro zone last week before Greek voters, in a referendum on Sunday, overwhelmingly rejected the austerity terms previously on offer for a bailout.
Eurogroup chairman Jeroen Dijsselbloem said the ministers would hold a conference call on Wednesday to review a Greek request for a medium-term assistance programme from the European Stability Mechanism bailout fund.