Greece cred­i­tors of­fer to ex­tend bailout 5 months

Greece must reach week­end deal to avoid de­fault: cred­i­tors

The China Post - - FRONT PAGE - BY ALEX PIG­MAN AND DANNY KEMP

Greece’s in­ter­na­tional cred­i­tors on Fri­day of­fered Athens a five­month, 12-bil­lion-euro (US$13.4 bil­lion) ex­ten­sion of its bailout pro­gram but said it must seal a deal this week­end to avoid an IMF de­fault next week.

An­gela Merkel and Fran­cois Hol­lande dis­cussed fi­nanc­ing plans with left­ist Greek Prime Min­is­ter Alexis Tsipras on the eve of a “decisive” meet­ing of eu­ro­zone fi­nance min­is­ters aimed at find­ing a deal to end the cri­sis.

The of­fer came af­ter in­ten­sive talks in Brus­sels this week to end the stand­off be­tween Tsipras’s anti-aus­ter­ity gov­ern­ment, which has balked at fur­ther re­forms-for-cash af­ter five years of bailout- im­posed eco­nomic hard­ship.

Cred­i­tors are ready to quickly dis­burse 1.8 bil­lion eu­ros in fi­nan­cial aid to help Athens meet a 1.5 bil­lion euro IMF debt re­pay­ment on June 30 as long as the Greek par­lia­ment ap­proves dis­puted re­forms, ac­cord­ing to pro­pos­als seen by AFP.

Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble said the chances for a bailout deal stand at about “50-50,” with Euro­pean mar­kets fluc­tu­at­ing as Greece’s fate re­mains in sus­pense.

Ger­man Chan­cel­lor Merkel and French Pres­i­dent Hol­lande told Tsipras in brief talks on the side­lines of an EU sum­mit that another emer­gency Eurogroup meet­ing of fi­nance min­is­ters on Satur­day was now crit­i­cal for an agree­ment.

“They re­minded him that this meet­ing was cru­cial and decisive and that it was vi­tal now to work to­wards a deal on a pack­age that in­cludes re­forms, in­vest­ment and fi­nanc­ing,” a source said.

Tsipras Slams ‘harsh’ Of­fer

Tsipras told Merkel and Hol­lande he could not un­der­stand their “harsh” stance.

“Alexis Tsipras in­formed the two lead­ers on the Greek pro- posal and stressed that the Greek side does not un­der­stand the per­sis­tence of in­sti­tu­tions in such harsh mea­sures,” a Greek gov­ern­men­tal source told AFP.

Eu­ro­zone fi­nance min­is­ter talks on Thurs­day that had been sup­posed to pro­duce a deal that EU lead­ers could rub­ber stamp at their sum­mit next door broke down with no agree­ment.

Jeroen Di­js­sel­bloem, the head of the Eurogroup of fi­nance min­is­ters, said a deal had to be clinched on Satur­day or there will not be enough time for it to get par­lia­men­tary ap­proval.

“To­mor­row it re­ally has to hap­pen, for the sim­ple rea­son that it has to go through par­lia­ment, first the Greek then of sev­eral mem­ber states,” the Dutch fi­nance min­is­ter told jour­nal­ists in The Hague.

Un­der the cred­i­tor pro­pos­als, the im­me­di­ate 1.8 bil­lion euro dis­burse­ment — prof­its from Greek bonds held by the Euro­pean Cen­tral Bank — would be paid “as soon as the Greek par­lia­ment has ap­proved with a res­o­lu­tion the agree­ment with the (cred­i­tor) in­sti­tu­tions and adopted a first set of leg­isla­tive ac­tions,” the plans said.

The pro­posal by the three main cred­i­tors — the Euro­pean Com­mis­sion, ECB, and In­ter­na­tional Mon­e­tary Fund — said a “five­month ex­ten­sion of the cur­rent pro­gram ... would be fea­si­ble dur­ing which a to­tal of 12 bil­lion eu­ros of fi­nan­cial sup­port would be pro­vided.”

Later pay­ments, in­clud­ing money to cover huge pay­ments owed the ECB this sum­mer, would come from the EU’s fire­fight­ing res­cue fund, the Euro­pean Sta­bil­ity Mech­a­nism, as well as cash cur­rently ded­i­cated to sup­port Greece’s banks.

The plan has al­ready been sent to Ger­man par­lia­ment mem­bers who will vote on the mea­sures if the Greek gov­ern­ment ac­cepts the deal on Satur­day, sources said.

The IMF could also con­trib­ute to the bailout ex­ten­sion, but only if cer­tain con­di­tions are met, un­der­scor­ing dif­fer­ences be­tween Europe and the Washington-based len­der which wants Greece’s huge debt moun­tain to be re­duced.

Greece also wants debt cuts as part of a so­lu­tion to the five months of bit­ter ne­go­ti­a­tions over the un­lock­ing of the fi­nal 7.2 bil­lion euro (US$8.1 bil­lion) pay­out from its cur­rent ex­ten­sion, which ex­pires on June 30.

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