Greece to ‘maybe’ submit aid proposal at Brussels summit
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GREECE is set to make a formal request for a new bailout programme as early as today, Euro group chief Jeroen Dijsselbloem said yesterday after eurozone finance ministers met to discuss the next steps after the Greek referendum.
“The Greek government will send the Euro group a new request letter for ESM (European Stability Mechanism, the EU’s bailout fund) support and as soon as that comes in, hopefully tomorrow morning, we will have another conference call for the Euro group,” Dijsselbloem told reporters.
With Greek lenders down to their last few days of cash and the European Central Bank tightening the noose on their funding, Greek Prime Minister Alexis Tsipras tried to convince the bloc’s other 18 leaders, many of whom are exasperated with five years of crisis, to open negotiations fast on a new loan to rescue Greece.
The leaders of Germany and France, the currency area’s two main powers, said after conferring on Monday that the door was still open to a deal to save Greece from plunging into economic turmoil and ditching the euro.
But Chancellor Angela Merkel, under pressure in Germany to cut Greece loose, made clear it was up to Tsipras to come up with convincing proposals after Athens spurned the tax rises, spending cuts and pension and labor reforms that were on the table before its 240 billion euro (US$263 billion) bailout expired last week.
European Commission President Jean-Claude Juncker, under suspicion from both sides for trying to broker a last-minute deal, told the European Parliament: “There are some in the European Union who openly or secretly are working to exclude Greece from the eurozone.”
Skepticism no secret
He did not name names but may have been referring to German Finance Minister Wolfgang Schaeuble, who has made no secret of his skepticism about Greece’s fitness to stay in the euro.
From the Greek side, the key to making any deal politically acceptable will be to win a stronger commitment from Merkel and other lenders to reschedule Greece’s giant debt burden, which the International Monetary Fund says is unsustainable.
Without some firmer pledge of debt relief, neither Greece nor the IMF is likely to accept a deal. But that may be more than Germany and its northern allies can swallow.
“The door is open to negotiations, but there isn’t much time left and the situation is urgent both for Greece and for Europe,” French President Francois Hollande said in a joint media appearance with Merkel in Paris.
At stake at the Brussels summit was more than just the future of Greece, a nation of 11 million that makes up just 2 percent of the eurozone’s economic output and population.
If Greek banks run out of money and the country has to print its own currency, it could mean a state leaving the euro for the first time since it was launched in 1999, creating a precedent and fueling doubts about the long-term viability of an incomplete European monetary union.
Tsipras’s proposals are not expected to go much beyond a letter he sent to eurozone partners last week, accepting most of the terms of a creditors’ offer that was no longer on the table but still seeking some loopholes for social or coalition reasons.
Juncker told EU lawmakers in Strasbourg he was working night and day to get negotiations reopened.
“Throwing Greece out of the monetary union or indeed the European Union is not something we want or indeed should want,” he said.
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