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Efforts aimed at finding a response to the Greek referendum increase as creditors call for new proposals

Efforts aimed at finding a response to the Greek referendum increase as creditors call for new proposals

Governments’ heads are at odds with the European commission and Germany leaving Greece on its own while Italy, Spain and France eagerly wait for a reasonable deal. By Monday evening, France and Germany were scrambling in their effort to prevent a major split of the eurozone over Greece following the “No” campaigners’ dramatic victory on Sunday. Angela Merkel, the German Chancellor and France’s president, Francois Hollande asked Greece to come up with “serious” proposals.

The German chancellor and France president struggled to come up with a common strategy following the resounding “No” vote to the five years of the eurozone-scripted austerity. Their aim was to bring forward a joint approach for dealing with the growing debt crisis before the emergency summit of the erozone that is scheduled for Tuesday in Brussels to address the fallout.

Merkel on the other hand said that the Greek side did not provide a basis for the negotiations. She called on Alexis Tsipras, the Greece Prime minister to immediately make another move. However, Tsipras has insured himself against the purported plots by the eurozone to remove him from power and then force a change of the current regime by causing a national consensus by the five major parties behind the negotiating strategy whose focus is on securing a debt relief. He also sacrificed Yanis Varoufakis, the finance minister. This move seemed like a conciliatory signal aimed at appeasing the Greece’s creditors.

Meanwhile, concerns continue to mount with Greece banks staying closed on Tuesday and Wednesday after running out of cash. The reopening of the banks was scheduled for Tuesday. However, the head of the banking association in Greece, Louka Katseli announced that the duration had to be extended after the Monday talks. There are also concerns that the debt crisis will inflict severe damage on the economy of the country. European Union’s leaders have voiced despair. Nevertheless, there was a new development following the announcement by the European Central Bank that it would provide cash support to Greek banks on emergency basis.

Marino, the Spanish Prime Minister said that the ball is now on Greek’s court. He added that any assistance for Greece should be accompanied by a responsibility. Mark Rutte, the Dutch Prime Minister was tougher on Greece saying that Greece had to agree to “deep reforms” in order to remain part of the eurozone.

During an earlier conference, the vice-president of the European Commission, Valdis Dombrovskis said that Greece government had to be honest and responsible in terms of the possible consequences of its decisions. However, he said that there was no need to worry about eurozone’s stability as there is everything required to manage the current situation.

The last bailout for Greece expires on Tuesday. Greece missed the €1.6bn payment for the IMF. The IMF and the European Commission wanted Greece to slash its welfare spending and raise taxes in order to meet debt obligations. However, the Greece government’s left wing led by Syriza that was elected on the anti-austerity platform in January said that creditors were using fear as a means of increasing pressure on the Greeks.

 

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