Greece offers new proposals ahead of crucial summit
PRIME MINISTER TSIPRAS SAYS PLAN PROVIDES ‘DEFINITIVE SOLUTION’ TO DEBT DEAL LOGJAM ● A European source said Tsipras and Juncker held talks and there were many exchanges and “informal work under way”.
Greek Prime Minister Alexis Tsipras put forward new proposals to European leaders yesterday aimed at ending his country’s debt crisis, on the eve of a summit which could determine whether Greece crashes out of the Eurozone.
In a telephone call with German Chancellor Angela Merkel, French President Francois Hollande and European Commission President Jean-Claude Juncker, Tsipras unveiled the new proposals on a “mutually beneficial deal”, the Greek premier’s office said in a statement.
It said the plans were aimed at reaching a “definitive solution” to the standoff between Athens and its creditors — the European Commission, International Monetary Fund and European Central Bank — amid growing global concern over a potential “Grexit” from the Eurozone.
Pressure is mounting to find a way of preventing Greece defaulting on its debt repayments due at the end of the month, with an emergency summit of the leaders of the 19 Eurozone countries due today in Brussels.
Greece’s anti-austerity government met yesterday to refine its proposals, while a European source said Tsipras and Juncker “held talks Saturday and will again speak Sunday”, adding that there were many exchanges and “informal work under way to find a solution”.
Scorn for IMF
If there is no deal, Greece seems likely to default on an IMF debt payment of around €1.5 billion ($1.7 billion) due on June 30, and with that risk a chaotic exit from the Eurozone.
The details of the proposals were not disclosed, but Greek minister of state Nikos Pappas, who is close to Tsipras, told the Ethos newspaper yesterday that his country did not want any more help from the IMF.
“I am one of those who think that the IMF should not be in Europe. I hope we find a solution without its participation,” Pappas said.
The IMF was called in to help rescue Greece at the end of 2009 when the debt-plagued country could no longer borrow on international markets.
The EU’s involvement in the bailout, which was to provide €240 billion (Dh999.95 billion) in loans in exchange for drastic austerity measures and reforms, runs out at the end of this month, but IMF support was supposed to continue to March 2016.
Talks between Greece and its lenders have been deadlocked for nine months over the payment of the next €7.2-billion tranche of the bailout, with talk also turning to an extension of the European help.
Long-term deal sought
For the Greek government any extension of the bailout should be about kick-starting the country’s devastated economy and not further austerity.
“The agreement should be of a type and time frame so that it would restore confidence,” Pappas told the newspaper. “It shouldn’t be short-term which would only lead to further uncertainty.”
France and Germany have told Greece it must have a detailed agreement on economic reform measures negotiated and written with the trio of bailout monitors before a crucial leaders’ summit between Athens and its creditors today.
With the Greek cabinet meeting yesterday to consider compromise proposals, Francois Hollande and Angela Merkel both telephoned Alexis Tsipras, the prime minister, to remind him that he needed to get a staff level agreement with the European Commission, IMF and ECB ahead of the summit.
They told him the summit was not for “negotiations” — practically impossible with 19 members present — and urged him to reach a deal with the institutions. If a deal is reached, then the summit could start talking about the Greek debt and a third bailout.
France is open to discussing debt relief and restructuring, Hollande told him.
The Greek cabinet was summoned to a meeting at prime minister Tsipras’ Maximos Mansion residence yesterday morning for a last-ditch meeting to hash out the government’s strategy.
● Yanis Varoufakis, Greece’s finance minister, writing in German daily Frankfurter Allgemeine Zeitung, has said German chancellor Angela Merkel faces “a stark choice” ahead of the summit.
Electoral mandates
Ministers are expected to discuss how Tsipras can bridge his two seemingly intractable electoral mandates: to end austerity and block further spending while also satisfying creditors’ demands for reform to keep Greece in the Eurozone.
The summit was called after Thursday night’s failure of Eurozone finance ministers’ meeting in Luxembourg to cut a deal that would unlock €7.2 billion (Dh30 billion) in bailout funds Athens needs to pay the International Monetary Fund by the end of June or face default.
Minister of State Nikos Pappas used an interview on Saturday with the country’s Ethnos newspaper to reiterate the government’s
firm opposition to cuts to pension plans or wages.
Yanis Varoufakis, Greece’s finance minister, writing in the
German daily Frankfurter Allgemeine Zeitung, has said German chancellor Angela Merkel faces “a stark choice” ahead of the crucial summit of European leaders in Brussels today.
Merkel could enter into “an honourable agreement with a government that opposes bailouts” and wants “a negotiated solution that ends the Greek crisis once and for all”. The second option was to “heed the sirens” from her government, which he said were “encouraging her to jettison the only Greek government that is principled and which can carry the Greek people along the path of genuine reform.”
Varoufakis said the Greek government would come to Brussels today willing to compromise. but it would only compromise as long as the Syriza-led government was not asked to take on new loans “under conditions that offer little hope that Greece can pay back its debts”.
“The choice, I am very much afraid, is hers,” he said.
In a sign of the growing anxiety in Greece, savers withdrew more than €1.6 billion in deposits on Friday, according to two banking sources, the largest withdrawal in one day since Greece’s left-wing government took office in January.
More than €6 billion left the system last week, and bankers fear the withdrawals could speed up when the banks reopen today.
Syriza supporters were expected to rally in front of Parliament yesterday evening to urge the government not to give in to creditors’ demands.