Debt crisis in Greece-Leaders trying to thrash out deal

Debt crisis in Greece-Leaders trying to thrash out deal

Eurozone leaders in Brussels have talked through the night in the bid to agree to terms for a new bailout for Greece.

Reports indicate a draft compromise has been put to the emergency summit though there are no details that have emerged thus far.

Banks in Greece in collapse without a new bailout and the country could exit the euro.

Greece is being told to pass legislation on a series of reforms by Wednesday before any talks on another bailout can commence.

Earlier, Eurozone finance ministers made submission of a list of measures to the leaders following 2 days of fraught discussions.

However, one official of the Greek government termed the proposals as “very bad”. Another said some of those proposals appeared to have been designed to “humiliate” Greek Prime Minister, Alexis Tsipras and his left-wing Syriza government.

The summit was stopped for several hours overnight with the purpose of allowing talks between Mr Tsipras, German Chancellor Angela Merkel, French President Francois Hollande and European Council President Donald Tusk.

Mr Tusk’s spokesman, early on Monday announced the summit was reconvening to discuss a “compromise proposal”.

The 4 page document of draft proposals put forward by Eurozone finance ministers include:

  • Reforms set out by Greece to be ratified by Wednesday, 15 July by parliament
  • “Ambitious” reforms to labor markets and pensions
  • International creditors to work on the ground in Athens and have full oversight of draft legislation
  • Possible transfer of €50bn in “valuable” Greek assets to external fund for eventual privatization
  • Possible talks on “swift negotiations on a time-out from the euro area, with possible debt restructuring” if they do not agree on a bailout.

One senior EU official however said there was no possibility of “time-out” proposal surviving in any final document that would be approved by leaders of the Eurozone. Another official said there was no provision and as such, no legal basis for such an arrangement in the EU treaties.

Reports as well emerged that Greece was holding out over the proposed role of the IMF in the new programme and over the independent fund to hold Greek assets- (follow this link to read more).

Tough decisions for Greece

There might be only 4 pages, but if the draft document is agreed, it will be an extremely difficult pill for the Greeks to swallow.

For Alexis Tsipras and his left-wing Syriza-led administration, some of the ideas will be nothing short of humiliation.

Though the Greek MPs might pass sweeping reforms by Wednesday, the government would be forced to allow international creditors to fully monitor its work in Athens and in agreement with the draft laws in advance.

Syriza came into power by making promises of ending such oversight.

Another possible step is that of “amending or compensating” for any laws Syriza pushed through that ran counter to what was agreed upon with Eurozone in February.

That might mean having to overturn reinstatement of 4,000 civil servants such as cleaning ladies and school guards.

With banks already closed, the economy minister Giorgos Stathakis said on Saturday that if there is a new deal, banks could reopen within the week though he admitted it would take a “few months” to get rid of capital controls.






Related Articles