Greece creditors offer to extend bailout 5 months
Greece must reach weekend deal to avoid default: creditors
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.