Greece facing ‘do or die’ meeting
Print Edition
SENIOR eurozone officials have discussed the “worst case scenarios” for Greece including a possible default in case talks between Athens and its creditors fail, three European sources said yesterday.
Technocrats from the eurozone’s 19 member states are currently in Bratislava, Slovakia, to prepare for a do-or-die meeting of finance ministers set for Thursday in Luxembourg.
“In discussions, a default was mentioned as one of the scenarios that can happen when everything goes wrong,” one eurozone official told reporters.
Another source said: “Eurozone members have decided to start considering the consequences of non-payment (by Greece) and beyond.” A third added: “It was a preparation for the worst case. Countries wanted to know what was going on.”
Next week’s Luxembourg meeting is seen as the last chance for Greece to agree a reforms-for-cash deal with its creditors after five months of fruitless and ill-tempered talks.
No deal could thrust cash-starved Greece toward default and a catastrophic exit from the euro, rocking the global economy.
German Chancellor Angela Merkel urged Greece and its creditors to keep pushing for a cash-for-reforms deal after Brussels negotiations hit stalemate.
Time is fast running out for Greece to reach agreement with its EU and IMF lenders and avert a default at the end of June that could see it tumbling out of the eurozone.
But talks ended without a breakthrough on Thursday night and the International Monetary Fund team abruptly left Brussels.
Both sides tried to keep hope alive yesterday and a Greek minister said he hoped for an agreement on June 18. European Commission President Jean-Claude Juncker said the ball was in the Greek government’s court, while the Eurogroup chief demanded “serious proposals” for reforms.
Greece needs a deal to unlock aid or loosen curbs on how much it can borrow in short-term debt before a 1.6 billion euro (US$1.8 billion) IMF repayment due by the end of this month.
“Where there’s a will there’s a way but the will has to come from all sides so it’s important that we keep speaking with each other,” Merkel said in Berlin.
Despite the warnings of imminent default, Greek Prime Minister Alexis Tsipras is showing no signs of alarm. His first engagement after rushing home from Brussels on Thursday was an open air pop concert celebrating the revival of the ERT state TV station, closed two years ago under cuts ordered by European Union and IMF lenders.
Renewed uncertainty put European markets on the backfoot and sent Greece’s top share index down yesterday morning.
The German tabloid Bild reported that the German government was holding “concrete consultations,” including about how Athens might introduce capital controls restricting bank withdrawals in Greece and transfers abroad should the country go bust.
Economists believe a solution is possible but acknowledge that creditors may soon tell Athens to accept their demands or face Greece becoming the first country to exit the eurozone.
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