Greek Debt Crisis: Tsipras Concessions Welcomed As 'Good Basis for Progress'
Jennifer Rankin in Brussels and agencies
Monday 22 June 2015 02.14 EDT
Greece has submitted 11th-hour concessions to its creditors ahead of a crucial day of talks aimed at preventing it from crashing out of the eurozone.
It proposal followed a hectic round of telephone diplomacy on Sunday between Germany’s chancellor, Angela Merkel, the French president, Francois Hollande, and the European Commission president, Jean-Claude Juncker.
Juncker’s head of cabinet, Martin Selmayr, said the Athens proposal offered “a good basis for progress”, though he described the negotiations as a “forceps delivery”, underscoring the exertions to prevent Greece leaving the eurozone.
It was not immediately clear how far the Greek plan met its creditors’ demands for spending cuts and welfare reforms.
Negotiators are promising debt relief for Greece, which has seen its economy shrink by one quarter since the crisis began, but officials have stressed that a breakthrough will depend on a positive response from the Greek prime minister, Alexis Tsipras.
Greece’s international creditors are looking at a deal that would extend the country’s bailout by six months and supply up to €18bn (£12.9bn) in rescue funds.
Analysis Tsipras of Athens – a gripping drama entering its final act
Larry Elliott
Larry Elliott Read more
Eurozone leaders will discuss the plans at an emergency summit convened to resolve the debt crisis ahead of a €1.6bn (£1.1bn) payment to the International Monetary Fund that falls due on 30 June.
Talks between Greece’s leftist government and its creditors have been deadlocked for five months and the country is fast running out of money.
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Italy’s prime minister, Matteo Renzi, urged the two sides to seize a “window of opportunity”, saying all conditions were in place for them to reach a “win-win accord”.
Tsipras meets his three main creditors – the European Commission, the IMF and the European Central Bank (ECB) – on Monday morning, ahead of a meeting with the other 18 eurozone leaders that gets underway at 7pm.
Eurozone finance ministers are also gathering in Brussels to hammer out technical details, just four days after an earlier meeting broke up in mutual recriminations without any progress.
The meeting of European leaders is a victory for Tsipras, who has long argued that the agreement can be reached only at the highest political levels.
Greece finds out on Monday if it will get more emergency funds from the ECB, which has sustained the Greek financial system as funds drain out of Greek banks.
According to Reuters, Greek depositors lodged €1bn of withdrawal orders with Greek banks over the weekend, on top of the €4bn that had been taken out of cash points and counters last week.
With the clock ticking, some officials think the only way to avoid an IMF default is for the ECB to raise the ceiling on the short-term debt Athens is allowed to sell. This would need to happen by Monday next week.
The six-month rescue extension being considered would unlock the €7.2bn in Greece’s bailout fund that is yet to be disbursed as well, as €10.9bn already lent to the country but earmarked for recapitalisation of its weakened banks. The latter sum could be quickly transferred to the government to facilitate debt repayments.
Underlining the growing concern beyond Greece, several thousand demonstrators gathered in Brussels on Sunday and several hundred in Amsterdam to plead for solidarity with the cash-strapped country.
In Athens itself, more than 7,000 people took to the streets for the second time this week to protest austerity with banners reading “A different Europe with Tsipras” and “You can’t blackmail the people, the country is not for sale”.
The head of Greece’s biggest bank said she thought “sanity will prevail” and lead both sides to a deal.
Louka Katseli, the chief of the National Bank of Greece, told BBC radio: “To enter into such uncharted waters and take up all the risk both for the eurozone and for Greece for two or three billion [euros] difference, I think it’s insane.”
Agence France-Presse contributed to this report
Monday 22 June 2015 02.14 EDT
Greece has submitted 11th-hour concessions to its creditors ahead of a crucial day of talks aimed at preventing it from crashing out of the eurozone.
It proposal followed a hectic round of telephone diplomacy on Sunday between Germany’s chancellor, Angela Merkel, the French president, Francois Hollande, and the European Commission president, Jean-Claude Juncker.
Juncker’s head of cabinet, Martin Selmayr, said the Athens proposal offered “a good basis for progress”, though he described the negotiations as a “forceps delivery”, underscoring the exertions to prevent Greece leaving the eurozone.
It was not immediately clear how far the Greek plan met its creditors’ demands for spending cuts and welfare reforms.
Negotiators are promising debt relief for Greece, which has seen its economy shrink by one quarter since the crisis began, but officials have stressed that a breakthrough will depend on a positive response from the Greek prime minister, Alexis Tsipras.
Greece’s international creditors are looking at a deal that would extend the country’s bailout by six months and supply up to €18bn (£12.9bn) in rescue funds.
Analysis Tsipras of Athens – a gripping drama entering its final act
Larry Elliott
Larry Elliott Read more
Eurozone leaders will discuss the plans at an emergency summit convened to resolve the debt crisis ahead of a €1.6bn (£1.1bn) payment to the International Monetary Fund that falls due on 30 June.
Talks between Greece’s leftist government and its creditors have been deadlocked for five months and the country is fast running out of money.
Advertisement
Italy’s prime minister, Matteo Renzi, urged the two sides to seize a “window of opportunity”, saying all conditions were in place for them to reach a “win-win accord”.
Tsipras meets his three main creditors – the European Commission, the IMF and the European Central Bank (ECB) – on Monday morning, ahead of a meeting with the other 18 eurozone leaders that gets underway at 7pm.
Eurozone finance ministers are also gathering in Brussels to hammer out technical details, just four days after an earlier meeting broke up in mutual recriminations without any progress.
The meeting of European leaders is a victory for Tsipras, who has long argued that the agreement can be reached only at the highest political levels.
Greece finds out on Monday if it will get more emergency funds from the ECB, which has sustained the Greek financial system as funds drain out of Greek banks.
According to Reuters, Greek depositors lodged €1bn of withdrawal orders with Greek banks over the weekend, on top of the €4bn that had been taken out of cash points and counters last week.
With the clock ticking, some officials think the only way to avoid an IMF default is for the ECB to raise the ceiling on the short-term debt Athens is allowed to sell. This would need to happen by Monday next week.
The six-month rescue extension being considered would unlock the €7.2bn in Greece’s bailout fund that is yet to be disbursed as well, as €10.9bn already lent to the country but earmarked for recapitalisation of its weakened banks. The latter sum could be quickly transferred to the government to facilitate debt repayments.
Underlining the growing concern beyond Greece, several thousand demonstrators gathered in Brussels on Sunday and several hundred in Amsterdam to plead for solidarity with the cash-strapped country.
In Athens itself, more than 7,000 people took to the streets for the second time this week to protest austerity with banners reading “A different Europe with Tsipras” and “You can’t blackmail the people, the country is not for sale”.
The head of Greece’s biggest bank said she thought “sanity will prevail” and lead both sides to a deal.
Louka Katseli, the chief of the National Bank of Greece, told BBC radio: “To enter into such uncharted waters and take up all the risk both for the eurozone and for Greece for two or three billion [euros] difference, I think it’s insane.”
Agence France-Presse contributed to this report
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