Greece on the brink of repayment default
BRUSSELS: It is past midnight on Saturday when the phone rings on the 13th floor of the European Commission, bringing news the EU is facing an unprecedented crisis after last-ditch talks with Greece collapsed.
Only a few hours earlier Greece’s leaders had agreed to continue talks to avoid a default on the country’s debts that could force it to crash out of the single currency and even the European Union.
But now the government led by Prime Minister Alexis Tsipras has made the shock announcement that any deal with Greece’s creditors — the EU, European Central Bank and International Monetary Fund — will be put to a public referendum.
In Brussels, a sense of stupor prevails. The decision comes at the worst moment, in the final stage of negotiations when ‘98-99 per cent’ of the deal had already been agreed, according to a participant in the talks.
The mood is still sombre hours later as EU ministers begin to arrive for their fifth round of discussions in 10 days to end months of cash-for-reforms wranglings and years of economic crisis in Greece. “This is not the first time that the Greek government has created more and more drama,” said the Slovakian Finance Minister Peter Kazimir.
Fatigue and frustration reign among EU negotiators sick of the negotiating style of Athens’s leftwing leaders, with one official quipping that they “learn the state of the talks via leaks” to the press. Greece’s Finance Minister Yanis Varoufakis — seen in Brussels as a key troublemaker in the talks because of his abrupt, and flamboyant, style — arrives dressed all in black.
Greece’s request rejected
In the meeting room, those on the other side of the negotiation table keep their distance. Varoufakis “lives in a parallel reality,” says one diplomat.
As the talks resume they swiftly hit a key stumbling block: the 18 other members of the eurozone refuse Greece’s request to extend its repayment deadline by a month to what would be after the July 5 referendum.
Just another ploy to win time, grumble the EU’s negotiators. Varoufakis says he plans to seek legal advice on whether the other eurozone states can make a decision without his agreement.
In the packed press room, rumours fly the talks are near an end, that Varoufakis is planning to hold a news conference. In the end it is the Netherland’s Jeroen Dijsselbloem, head of the Eurogroup of finance ministers, who takes the stand. In a weak voice, he announces that Greece’s huge bailout plan.