Greek res­cue deal likely

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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