Athens lays out new debt deal pro­pos­als

Com­ing eu­ro­zone talks could de­ter­mine ‘Grexit’ pos­si­bil­ity


Greek Prime Min­is­ter Alexis Tsipras un­veiled new pro­pos­als to Euro­pean lead­ers Sun­day aimed at end­ing his coun­try’s debt cri­sis, on the eve of a sum­mit that could de­ter­mine whether Greece crashes out of the eu­ro­zone.

In a tele­phone call with Ger­man Chan­cel­lor An­gela Merkel, French Pres­i­dent Fran­cois Hol­lande and Euro­pean Com­mis­sion Pres­i­dent Jean-Claude Juncker, Tsipras un­veiled the new pro­pos­als on a “mu­tu­ally ben­e­fi­cial deal,” the Greek premier’s of­fice said in a state­ment.

It said the plans were aimed at reach­ing a “de­fin­i­tive so­lu­tion” to the stand­off be­tween Athens and its cred­i­tors — the Euro­pean Com­mis­sion, In­ter­na­tional Mon­e­tary Fund and Euro­pean Cen­tral Bank — amid grow­ing global con­cern over a po­ten­tial “Grexit” from the eu­ro­zone.

Pres­sure is mount­ing to find a way of pre­vent­ing Greece fi­nally de­fault­ing on its debt re­pay­ments due at the end of the month, with an emer­gency sum­mit of the lead­ers of the 19 eu­ro­zone coun­tries due on Mon­day in Brus­sels.

Greece’s anti-aus­ter­ity gov­ern­ment met Sun­day to re­fine its pro­pos­als, while a Euro­pean source said Tsipras and Juncker “held talks Satur­day and will again speak Sun­day,” adding that there were many ex­changes and “in­for­mal work un­der­way to find a so­lu­tion.”

If there is no deal, Greece seems likely to de­fault on an IMF debt pay­ment of around 1.5 bil­lion eu­ros ( US$1.7 bil­lion) due on June 30, and with that risk a chaotic exit

from the eu­ro­zone.

‘So­lu­tion with­out IMF’

The de­tails of the pro­pos­als were not dis­closed, but Greek Min­is­ter of State Nikos Pap­pas, who is close to Tsipras, told the Ethos news­pa­per on Sun­day that his coun­try did not want any more help from the IMF.

“I am one of those who think that the IMF should not be in Europe. I hope we find a so­lu­tion with­out its par­tic­i­pa­tion,” Pap­pas said.

He claimed that Europe “has no need” of the Washington-based in­sti­tu­tion, which has an “agenda which is not at all Euro­pean” and “can con­tinue with­out it and its money.”

The IMF was called in to help res­cue Greece at the end of 2009 when the debt-plagued coun­try could no longer bor­row on in­ter­na­tional mar­kets.

The EU’s in­volve­ment in the huge bailout, which was to pro­vide 240 bil­lion eu­ros (US$270 bil­lion) in loans in ex­change for dras­tic aus­ter­ity mea­sures and re­forms, runs out at the end of this month, but IMF sup­port was to sup­posed to con­tinue to March 2016.

Talks be­tween Greece and its lenders have been dead­locked for nine months over the pay­ment of the next 7.2-bil­lion-euro tranche of the bailout, with talk also turn­ing to an ex­ten­sion of the Euro­pean help.

For the Greek gov­ern­ment any ex­ten­sion of the bailout should be about kick-start­ing the coun­try’s dev­as­tated econ­omy and not fur­ther aus­ter­ity.

They also want the coun­try’s crip­pling debt bur­den — of nearly 180 per­cent of GDP — light­ened.

“The agree­ment should be of a type and time­frame so that it would re­store con­fi­dence,” Pap­pas told the news­pa­per. “It shouldn’t be short-term which would only lead to fur­ther un­cer­tainty.”

Pro­pos­als from Athens have pre­vi­ously been knocked back by their cred­i­tors, who have in­sisted on their own mix­ture of cuts and re­forms, which Pap­pas dis­missed as “un­ac­cept­able to which­ever Greek po­lit­i­cal party” was in power.

‘Bridg­ing the gap’

Greek Min­is­ter of State Alekos Flam­bouraris said Satur­day that Athens would pro­pose re­worked mea­sures that “bridge the gap,” while also pre­dict­ing Greece’s cred­i­tors wouldn’t be sat­is­fied with the ges­tures, Greek media re­ported.

“You’ll see they won’t ac­cept loos­en­ing bud­get (re­stric­tions), or our pro­posal on the debt,” he said of two main stick­ing points in the talks.

But the coun­try’s Fi­nance Min­is­ter Yanis Varoufakis, whose flam- boy­ant style has irked many of his Euro­pean coun­ter­parts, turned the ta­bles by putting the onus on the leader of pay­mas­ter Ger­many to make a deal.

“The Ger­man chan­cel­lor has a clear de­ci­sion to make on Mon­day,” he wrote in an op-ed for the Frank­furter All­ge­meine Zeitung.

“On our side, we will come with de­ter­mi­na­tion to Brus­sels to agree to fur­ther com­pro­mises as long as we are not asked to do what the pre­vi­ous (Greek) gov­ern­ments have done: ac­cept new debt un­der con­di­tions that of­fer lit­tle hope for Greece to re­pay its debts,” he wrote, with­out spec­i­fy­ing the com­pro­mises.

Hol­lande said in Mi­lan that France and Italy shared a “com­mon po­si­tion” on the Greek cri­sis, which was “to have an agree­ment and the sooner the bet­ter.”

De­mon­stra­tors around Europe on Satur­day took to the streets to protest against spend­ing cuts and aus­ter­ity mea­sures taken by their gov­ern­ments, and ex­press­ing sol­i­dar­ity with Greece.


Greece’s Fi­nance Min­is­ter Yanis Varoufakis ar­rives for a cab­i­net meet­ing at the Greek Prime Min­is­ter’s of­fice in Athens on Sun­day, June 21.

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