Greece Given 72 Hours to Win Trust by Passing Bailout Laws (1)
2015-07-12 17:20:41.799 GMT
(Updates with summit progress in seventh paragraph. For
more on the Greek crisis, click here.)
By Radoslav Tomek, Ott Ummelas and Karl Stagno Navarra
(Bloomberg) -- Prime Minister Alexis Tsipras was given
three days to push new austerity measures through parliament and
keep alive Greece’s chances of staying in the euro.
Finance ministers meeting in Brussels demanded Greece enact
economic reforms before opening detailed negotiations on an aid
package of at least 74 billion euros ($83 billion). They left it
to the region’s leaders, who started their own session a few
hours later, to pin down how far those measures should go. If
Tsipras misses that deadline, Greece may be suspended from the
currency union, Finnish Finance Minister Alexander Stubb said.
“Greece is being given exactly two choices,” Stubb said.
“It’s a rather black-and-white choice.”
Riled by six months of personal attacks and contradictory
messages from Athens, euro-area policy makers are forcing
Tsipras to overcome the credibility gap they said was a key
hurdle to more loans. They’re no longer willing to take him at
his word.
“The situation is extremely difficult if you consider the
economic situation in Greece and the worsening in the last few
months, but what has been lost also in terms of trust and
reliability,” German Chancellor Angela Merkel told reporters.
With Greek banks rationing cash and the European Central
Bank reviewing how long it can keep the country’s financial
system alive, Tsipras won a stay of execution as he arrived at
the summit when a Sunday meeting of the 28 European Union
leaders was canceled. The full group of leaders would only have
gathered to discuss how to handle Greece’s exit from the euro,
Maltese Prime Minister Joseph Muscat said.
The leaders’ summit began with presentations on the state
of play from officials including Jeroen Dijsselbloem, the
finance ministers’ leader, European Central Bank President Mario
Draghi and Tsipras himself, according to an EU official. The
leaders then set out their own positions before they broke for
bilateral meetings. Tsipras will hold a session with Merkel and
French President Francois Hollande, a Greek official said.
Demonstrating Commitment
Creditors are using the calendar as leverage on Greece.
Tsipras’s predecessors were given months to enact economic
reforms after tapping the first bailout loans in 2010.
Greece is asking for 22 billion euros by the end of August
to cover its immediate needs and as much as 86 billion in total,
Maltese Finance Minister Edward Scicluna said in an interview.
The country owes the ECB about 3.5 billion euros on July 20 and
missed a payment of about $1.7 billion to the International
Monetary Fund June 30.
“I’d like to see them demonstrating starting tomorrow in
their parliament they’re serious about implementing the changes,
legislative and structural, that need to be put in place,”
Irish Prime Minister Enda Kenny said. “And there are many of
them.”
Comments in Greece suggested the pressure was having its
intended effect.
An unsigned commentary in the Sunday edition of Avgi
newspaper, seen as a Syriza party mouthpiece, said Tsipras must
seal a deal, then address political fallout that is “driving
the country to elections in a short time.”
“The country has only the road of realism,” Kostis
Hatzidakis, an opposition New Democracy lawmaker and former
minister, said on Skai TV on Sunday. “The time for criticisms
will come, but we have to escape the eye of the storm first.”
Bailout Collateral
Greece has already caved to creditors’ demands, with
lawmakers endorsing Tsipras’s plan to increase sales taxes and
cut pensions in the early hours of Saturday. The vote marked an
abrupt turnaround for the Greek leader, who’d won an anti-
austerity referendum a week earlier accusing the rest of the
euro area of trying to blackmail his country.
“I am ready for an honest compromise,” Tsipras told
reporters as he arrived. “We owe it to the people of Europe
that want a united, not divided, Europe. We can reach an
agreement tonight if the parties involved want it.”
Some ministers on Sunday wanted Greece to place about 50
billion euros of state assets into an independent company that
could serve as collateral against aid loans, Luxembourg’s
finance chief Pierre Gramegna told reporters.
“It would remain in Greek hands, but it would create more
assurances,” Gramegna said. “There is great hesitation from
the Greek side and now the heads of state and government have to
choose.”
For Related News and Information:
Greece Bailout Optimism Sparks Slump in Europe’s Haven Bonds
Half-Century of European Integration at Stake in Greece Meeting
Euro Climbs Most in Two Years Versus Yen on Greece’s Bailout Bid
Top Stories: TOP <GO>
Most-read Greek news: MNI GRE 1W <GO>
--With assistance from Jonathan Stearns, Esteban Duarte, Kevin
Costelloe, David De Jong, Rebecca Christie, Patrick Donahue, Ian
Wishart, James G. Neuger, Mark Deen and Stephanie Bodoni in
Brussels, Nikos Chrysoloras and Marcus Bensasson in Athens,
Angela Cullen in Frankfurt and Elco van Groningen in Amsterdam.
To contact the reporters on this story:
Radoslav Tomek in Brussels at +421-2-5292-1227 or
rtomek@bloomberg.net;
Ott Ummelas in Brussels at +372-663-1128 or
oummelas@bloomberg.net;
Karl Stagno Navarra in Brussels at +39-645-206-300 or
ksnavarra@bloomberg.net
To contact the editors responsible for this story:
James Hertling at +44-20-3525-9330 or
jhertling@bloomberg.net
Ben Sills, Kevin Costelloe
2015-07-12 17:20:41.799 GMT
(Updates with summit progress in seventh paragraph. For
more on the Greek crisis, click here.)
By Radoslav Tomek, Ott Ummelas and Karl Stagno Navarra
(Bloomberg) -- Prime Minister Alexis Tsipras was given
three days to push new austerity measures through parliament and
keep alive Greece’s chances of staying in the euro.
Finance ministers meeting in Brussels demanded Greece enact
economic reforms before opening detailed negotiations on an aid
package of at least 74 billion euros ($83 billion). They left it
to the region’s leaders, who started their own session a few
hours later, to pin down how far those measures should go. If
Tsipras misses that deadline, Greece may be suspended from the
currency union, Finnish Finance Minister Alexander Stubb said.
“Greece is being given exactly two choices,” Stubb said.
“It’s a rather black-and-white choice.”
Riled by six months of personal attacks and contradictory
messages from Athens, euro-area policy makers are forcing
Tsipras to overcome the credibility gap they said was a key
hurdle to more loans. They’re no longer willing to take him at
his word.
“The situation is extremely difficult if you consider the
economic situation in Greece and the worsening in the last few
months, but what has been lost also in terms of trust and
reliability,” German Chancellor Angela Merkel told reporters.
With Greek banks rationing cash and the European Central
Bank reviewing how long it can keep the country’s financial
system alive, Tsipras won a stay of execution as he arrived at
the summit when a Sunday meeting of the 28 European Union
leaders was canceled. The full group of leaders would only have
gathered to discuss how to handle Greece’s exit from the euro,
Maltese Prime Minister Joseph Muscat said.
The leaders’ summit began with presentations on the state
of play from officials including Jeroen Dijsselbloem, the
finance ministers’ leader, European Central Bank President Mario
Draghi and Tsipras himself, according to an EU official. The
leaders then set out their own positions before they broke for
bilateral meetings. Tsipras will hold a session with Merkel and
French President Francois Hollande, a Greek official said.
Demonstrating Commitment
Creditors are using the calendar as leverage on Greece.
Tsipras’s predecessors were given months to enact economic
reforms after tapping the first bailout loans in 2010.
Greece is asking for 22 billion euros by the end of August
to cover its immediate needs and as much as 86 billion in total,
Maltese Finance Minister Edward Scicluna said in an interview.
The country owes the ECB about 3.5 billion euros on July 20 and
missed a payment of about $1.7 billion to the International
Monetary Fund June 30.
“I’d like to see them demonstrating starting tomorrow in
their parliament they’re serious about implementing the changes,
legislative and structural, that need to be put in place,”
Irish Prime Minister Enda Kenny said. “And there are many of
them.”
Comments in Greece suggested the pressure was having its
intended effect.
An unsigned commentary in the Sunday edition of Avgi
newspaper, seen as a Syriza party mouthpiece, said Tsipras must
seal a deal, then address political fallout that is “driving
the country to elections in a short time.”
“The country has only the road of realism,” Kostis
Hatzidakis, an opposition New Democracy lawmaker and former
minister, said on Skai TV on Sunday. “The time for criticisms
will come, but we have to escape the eye of the storm first.”
Bailout Collateral
Greece has already caved to creditors’ demands, with
lawmakers endorsing Tsipras’s plan to increase sales taxes and
cut pensions in the early hours of Saturday. The vote marked an
abrupt turnaround for the Greek leader, who’d won an anti-
austerity referendum a week earlier accusing the rest of the
euro area of trying to blackmail his country.
“I am ready for an honest compromise,” Tsipras told
reporters as he arrived. “We owe it to the people of Europe
that want a united, not divided, Europe. We can reach an
agreement tonight if the parties involved want it.”
Some ministers on Sunday wanted Greece to place about 50
billion euros of state assets into an independent company that
could serve as collateral against aid loans, Luxembourg’s
finance chief Pierre Gramegna told reporters.
“It would remain in Greek hands, but it would create more
assurances,” Gramegna said. “There is great hesitation from
the Greek side and now the heads of state and government have to
choose.”
For Related News and Information:
Greece Bailout Optimism Sparks Slump in Europe’s Haven Bonds
Half-Century of European Integration at Stake in Greece Meeting
Euro Climbs Most in Two Years Versus Yen on Greece’s Bailout Bid
Top Stories: TOP <GO>
Most-read Greek news: MNI GRE 1W <GO>
--With assistance from Jonathan Stearns, Esteban Duarte, Kevin
Costelloe, David De Jong, Rebecca Christie, Patrick Donahue, Ian
Wishart, James G. Neuger, Mark Deen and Stephanie Bodoni in
Brussels, Nikos Chrysoloras and Marcus Bensasson in Athens,
Angela Cullen in Frankfurt and Elco van Groningen in Amsterdam.
To contact the reporters on this story:
Radoslav Tomek in Brussels at +421-2-5292-1227 or
rtomek@bloomberg.net;
Ott Ummelas in Brussels at +372-663-1128 or
oummelas@bloomberg.net;
Karl Stagno Navarra in Brussels at +39-645-206-300 or
ksnavarra@bloomberg.net
To contact the editors responsible for this story:
James Hertling at +44-20-3525-9330 or
jhertling@bloomberg.net
Ben Sills, Kevin Costelloe