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.