Stalemate on Greek debt
Athens and creditors dig in after talks to reach default deal collapse
GREECE and its creditors have stuck to their positions after the collapse of talks aimed at preventing a default and possible euro exit, while Germany’s EU commissioner said it was time to prepare for a “state of emergency”.
Prime Minister Alexis Tsipras ignored pleas from European leaders to act fast.
Instead he blamed creditors for the collapse of the cash-for-reform talks on Sunday, the biggest setback in long-running negotiations to secure more aid for Greece.
Germany and other major creditor countries demanded the Athens government come to its senses and offer new proposals.
“It won’t work that Greece sets the terms and says ‘everyone has to dance to our tune’. Greece needs to get back to reality,” Volker Kauder, parliamentary floor leader of Chancellor Angela Merkel’s conservatives, said.
The European Commission said it would only resume mediation efforts if Greece put forward new proposals, while the Greek government spokesman said Athens would stick to its rejection of wage and pension cuts and higher taxes on basic goods.
“We have largely exhausted our limits,” Greek spokesman Gabriel Sakellaridis said.
Athens now has just two weeks to find a way out of the impasse before it faces a massive repayment due to the International Monetary Fund, potentially leaving it out of cash, unable to borrow and teetering on the edge of the currency area.
Despite the deepening crisis, Mr Sakellaridis said Mr Tsipras was going ahead with a planned visit to Russia from Thursday, the day eurozone finance ministers hold a crucial meeting in Luxembourg to review the stand-off with Greece.
EU officials said that without improved Greek proposals by Thursday, the Eurogroup would be very tough and was likely to present Greece with an ultimatum.
“No more new proposals; take it or leave it time is upon us, I think.
“Or very close,” one eurozone official said.
“We should work out an emergency plan because Greece would fall into a state of emergency,” Germany’s EU commissioner Guenther Oettinger said.
“Energy supplies, pay for police officials, medical supplies, and pharmaceutical products and much more” needed to be ensured, Mr Oettinger added.
The chief European Commission spokesman distanced himself from Mr Oettinger’s remarks when asked whether the EU executive was pursuing such a plan, saying Commission President Jean-Claude Juncker had been very busy trying to mediate an agreement.
In Athens, Mr Tsipras betrayed few signs of alarm.
Ignoring warnings from European policymakers that it was up to Athens to act now, he coolly said he was happy to wait it out till the lenders changed their minds.
“We will await patiently until the institutions accede to realism,” Mr Tsipras said. “We do not have the right to bury European democracy at the place where it was born.”
He blamed “political expediency” on the part of lenders and their insistence on new cuts in pensions “after five years of looting under the bailouts” for the latest impasse.