Ref­er­en­dum call marks ‘dra­matic twist’ in on­go­ing Greece saga

The China Post - - INTERNATIONAL -

“That is a sad de­ci­sion for Greece be­cause it has closed the door for fur­ther talks where the door was still open in my mind,” Di­js­sel­bloem said.

“We will hear from the Greek min­is­ter about whether all this is cor­rect and then we will talk about the con­se­quences that will have,” he added.

Chris­tine La­garde, the head of Greece’s most hard-line cred­i­tor, the IMF, said the len­der would keep work­ing on Greece’s econ­omy de­spite the ref­er­en­dum.

“The pur­pose of what we’re do­ing is to ac­tu­ally re­store the sta­bil­ity of the econ­omy in Greece, this is what we’ll con­tinue to do. We’ll con­tinue to work,” La­garde told re­porters be­fore join­ing the meet­ing.

“We have al­ways shown a will­ing­ness to­wards flex­i­bil­ity and we will con­tinue to do so,” she said.

Fin­nish Fi­nance Min­is­ter Alexan­der Stubb said an ex­ten­sion of the pro­gram as it stands “is out of the ques­tion.”

“I think plan B is fast un­rav­el­ing into plan A,” Stubb added, re­fer­ring to po­ten­tially more dras­tic op­tions for Greece, in­clud­ing those that could lead to an Athens exit from the euro.

Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble said on Satur­day the de­ci­sion by Athens to hold a ref­er­en­dum on the fu­ture of its bailout “uni­lat­er­ally” closed the door to more talks to end a five-month debt stand­off with its cred­i­tors.

“The Greek gov­ern­ment has, if I un­der­stand cor­rectly, ended the ne­go­ti­a­tions uni­lat­er­ally,” Schaeu­ble said as he ar­rived for talks with his eu­ro­zone coun­ter­parts.

Greek De­mands

With the ref­er­en­dum call, the agenda for the meet­ing of the 19-fi­nance min­is­ters is un­clear.

A se­nior EU of­fi­cial had said be­fore the ref­er­en­dum an­nounce­ment that “ei­ther the Greeks are ready to dis­cuss the latest pro­pos­als or the fi­nance min­is­ters will have to dis­cuss plan B,” re­fer­ring to more dras­tic op­tions that could in­clude an exit from the euro.

Ques­tioned if eu­ro­zone min­is­ters would dis­cuss the cur­rent pro­posal, another of­fi­cial replied: “That we will see. A num­ber of coun­tries want to de­bate plan B.”

Greek author­i­ties said that Tsipras had sent two of his clos­est aides to a key meet­ing with ECB head Mario Draghi, who for now is keep­ing the Greek bank­ing sys­tem alive with vi­tal cash.

Even be­fore his gov­ern­ment re­jected the pro­posal, Tsipras said he would refuse any take-it-or-leaveit of­fers, af­ter a two-day EU lead­ers’ sum­mit dom­i­nated by the cri­sis.

The call for a ref­er­en­dum was a dra­matic twist to a week-long se­ries of talks to end the stand-off be­tween the cred­i­tors and Tsipras’s left­ist gov­ern­ment, which has baulked at fur­ther re­forms in ex­change for cash.

Tsipras told Merkel and French Pres­i­dent Fran­cois Hol­lande on Fri­day that he could not un­der­stand the cred­i­tors’ “harsh” stance and asked for lee­way.

But the eu­ro­zone’s two most pow­er­ful lead­ers in­sisted that it was “vi­tal now to work to­wards a deal,” a source said.

Un­der their pro­posal, an 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 ap­proved laws re­flect­ing the deal.

Later pay­ments, in­clud­ing money to cover huge pay­ments owed to 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. Greece also wants debt writ­ten off as part of a so­lu­tion to end­ing its cur­rent bailout, which ex­pires on June 30.

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