Eleni Chrepa and Rebecca Christie Athens
The brinkmanship over Greece’s future intensified after Prime Minister Alexis Tsipras said yesterday that his government submitted a new proposal aimed at breaking the stalemate just as creditors set about finalising theirs.
Tsipras is waiting for European leaders to show their hand after they held top-level talks in Berlin on Monday night aimed at hatching a plan to unlock funds and avoid the country defaulting. The goal of the meeting was to hammer out an offer from creditor institutions that Greece could consider in coming days, according to two people familiar with the plan. The Greek government said it had not received any draft agreement.
“After submitting a complete proposal for a deal last night to institutions, we are not waiting for them to submit their own plan back to us,” Tsipras tsaid yesterday.
“Greece is the one that submits the plan.”
After four months of antagonism and extended deadlines, there’s now greater urgency in efforts to end the impasse and decide Greece’s fate.
While Greece has said it could make a debt repayment to the International Monetary fund (IMF) due on Friday, it is the smallest of four totalling almost e1.6 billion (R21.65bn) this month. The timing coincides with the expiration of a euro-region bailout by the end of this month.
The meeting in Berlin at the German Chancellery involved Angela Merkel, IMF chief Christine Lagarde, European Central Bank (ECB) president Mario Draghi, French President François Hollande and European Commission president Jean-Claude Juncker.
Representatives from the creditor institutions were said to be wrapping up their proposal, two people familiar with the matter said. It was still unclear whether it would allow for modifications, one of the people said.
Merkel’s office said in a statement that the five leaders “agreed that work must now be continued with greater intensity” and that “they have been in closest contact in recent days and want to remain so in the coming days, both among themselves and naturally also with the Greek government”.
EU economic commissioner Pierre Moscovici said there was “real progress” in talks, though he did not comment specifically about the Berlin meeting. He told French radio that the European bailout fund was included in negotiations over releasing aid, raising the prospect that it could play a role in any deal to break the standoff.
Greek bonds rose, with the yield on the two-year security falling 71 basis points to 24.2 percent as of 1.06pm in Athens yesterday. Financial markets in Greece opened after shutting on Monday for the Orthodox Pentecost holiday.
“Even a mediocre agreement is much better than the alternative for Greece, which is bankruptcy,” said Nicholas Economides, a professor of economics at New York University’s Stern School of Business. “Bankruptcy within the euro would be very difficult to manage and would require tremendous support from the ECB, which is unlikely.” – Bloomberg