EU tells Greece to reach a debt deal, stop ‘gam­bling’

The China Post - - INTERNATIONAL - BY DANNY KEMP

The EU’s top lead­ers warned Greek Prime Min­is­ter Alexis Tsipras Thurs­day to stop “gam­bling” and reach a des­per­ately needed debt deal to pre­vent a de­fault and crash­ing out of the euro.

Don­ald Tusk and Jean-Claude Juncker, the Euro­pean Union’s most se­nior of­fi­cials, pushed Tsipras af­ter talks be­tween the rad­i­cal left­ist Greek pre­mier and the lead­ers of France and Ger­many broke up with­out agree­ment.

Fresh protests erupted mean­while in Athens at the prospect of new aus­ter­ity cuts de­manded by Greece’s in­ter­na­tional cred­i­tors in re­turn for money to stave off de­fault when the Greek bailout ex­pires at the end of the month.

“For me it is very ob­vi­ous that we need de­ci­sions not ne­go­ti­a­tions now, and it’s my opin­ion that the Greek gov­ern­ment has to be a lit­tle bit more re­al­is­tic,” Tusk told a press con­fer­ence at a EULatin Amer­ica sum­mit in Brussels.

A meet­ing of eu­ro­zone fi­nance min­is­ters in Lux­em­bourg next Thurs­day would be “re­ally cru­cial” and “de­ci­sive” on reach­ing a deal to end a five-month stand­off be­tween Greece and its cred­i­tors, Tusk added.

Left­ist leader Tsipras has been play­ing a high-stakes game warn- ing Europe that aban­don­ing Greece would bring “catas­tro­phe” to the 19-mem­ber eu­ro­zone.

The Athens stock mar­ket soared by 7.3 per­cent on the be­lief that a bailout deal was im­mi­nent, with Euro­pean stocks also on the rise.

‘Los­ing pa­tience’

Euro­pean Com­mis­sion chief Juncker — who held fresh talks with Tsipras on the side­lines of the sum­mit on Thurs­day fol­low­ing a dis­as­trous meet­ing a week ear­lier — said he was grow­ing impatient with Greece.

“Peo­ple are grad­u­ally be­gin­ning to lose pa­tience. And I’m only hu­man, so I share their im­pa­tience,” Juncker told re­porters.

Greece’s cred­i­tors are de­mand­ing tough re­forms to un­lock the re­main­ing 7.2 bil­lion eu­ros (US$8.1 bil­lion) of Greece’s 240- bil­lion- euro bailout, which ex­pires at the end of June.

But the Greek pre­mier’s hardleft Syriza party, which won elec­tions in Jan­uary with a prom­ise to end five years of aus­ter­ity im­posed un­der two in­ter­na­tional bailouts since 2010, has re­fused to back down.

In Athens there was a re­peat of the protests that have erupted through­out the five- year debt cri­sis as Com­mu­nist trade union pro­test­ers oc­cu­pied the fi­nance min­istry in the land­mark Syn­tagma Square.

Unions called for fur­ther protests later Thurs­day against a gov­ern­ment “that no longer un­der­stands the real need of work­ers,” a state­ment said.

Greece’s public broad­caster ERT mean­while came back on the air on Thurs­day, ex­actly two years af­ter it was shut down by the pre­vi­ous gov­ern­ment, which had ac­cused it of be­ing waste­ful and mis­man­aged.

Late-night talks on Wed­nes­day be­tween Tsipras, Ger­man Chan­cel­lor An­gela Merkel and French Pres­i­dent Fran­cois Hol­lande pro­duced no deal but all sides said they had agreed to “in­ten­sify” ef­forts in the com­ing days.

But the sit­u­a­tion re­mains dire for Greece, with rat­ings agency Stan­dard & Poor’s on Wed­nes­day fur­ther cut­ting its junk rat­ing for Greek gov­ern­ment bonds af­ter it de­layed a debt pay­ment to the In­ter­na­tional Mon­e­tary Fund last week.

With­out the re­main­ing bailout cash Greece will be un­able to pay its for­eign debts, hav­ing al­ready had to or­der lo­cal Greek au­thor­i­ties to turn over their cash re­serves to help it meet ear­lier com­mit­ments.

The head of the Ger­man cen­tral bank warned Thurs­day that the dan­gers of contagion from a pos­si­ble Greek in­sol­vency could not be un­der­es­ti­mated.

The con­se­quences of such a sce­nario were “cer­tainly bet­ter con­tained than they were in the past, though they should not be un­der­es­ti­mated,” said Bun­des­bank chief Jens Wei­d­mann.

Athens has strongly re­jected many re­forms, such as changes to pen­sions and Greece’s sales tax, but on Thurs­day of­fi­cials seemed ready to make con­ces­sions.

Greek of­fi­cials also said they were dis­cussing a pos­si­ble ex­ten­sion of the bailout un­til March 2016, which would give more time to work out a long-term so­lu­tion.

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