Greece Talks Spill Into 2nd Day as Finance Chiefs Deadlock (1)
2015-07-11 23:13:16.253 GMT
(Adds comment from Finland’s Stubb in seventh paragraph.
For more on the Greek crisis, click here.)
By Karl Stagno Navarra, Radoslav Tomek and Ott Ummelas
(Bloomberg) -- European finance ministers deadlocked over
how to keep Greece in the euro, forcing emergency talks to
continue Sunday and threatening to delay the infusion Prime
Minister Alexis Tsipras desperately needs.
With Greece running out of money and its banks shut for the
past two weeks, the hardline group led by Germany signaled that
the country’s debt was too great, Tsipras’s reform proposals
were inadequate and, in any event, the Greeks couldn’t be
trusted to keep their word. Finance ministry aides will work
through the night, allowing finance chiefs to reconvene at 11
a.m. in Brussels before a leaders’ summit.
“It’s still very difficult, but work is still in
progress,” Dutch Finance Minister Jeroen Dijsselbloem, the head
of the Eurogroup, told reporters after nine hours of talks that
ended at midnight. “The issue of credibility and trust was
discussed and also, of course, the financial issues.”
The skepticism expressed by the policy makers came hours
after Tsipras won overwhelming support in the Greek Parliament
for a package of spending cuts, pension savings and tax
increases intended to win financial aid of at least 74 billion
euros ($83 billion). Among its shortcomings, the proposals
failed to reflect the economic deterioration since talks
collapsed and capital controls were imposed two weeks ago,
according to Dijsselbloem.
Their concerns were reflected by the media back home.
Germany’s Frankfurter Allgemeine Sonntagszeitung reported a
finance ministry proposal to suspend Greece from the euro area
for five years. The idea was dismissed as illegal and nonsense
by a European Union official who asked not to be named because
the talks are private.
Finnish media reported the Helsinki government flatly
opposed the bailout.
Finland’s Opposition
“I don’t believe that we are at this point authorising any
kind of additional loan to Greece,” Finland’s Alexander Stubb
said. “About half of members had the same stance as us and
maybe a few had another view.”
Greece and its creditors are struggling for common ground
after Tsipras missed a payment to the International Monetary
Fund June 30 and allowed its second rescue package to lapse the
same day. A new bailout will be Greece’s third in five years.
The five-month standoff between the former communist
student leader, whose party translates to Coalition of the
Radical Left, and his creditors deepened the country’s economic
misery. Bank withdrawals are limited to 60 euros a day, pensions
have been rationed and commerce is grinding to a halt.
Economic Abyss
“The Greek economy is moving closer to the abyss,”
Slovakia’s Peter Kazimir said before the meeting began.
While Greek government bonds rallied on Friday on optimism
Tsipras’s package would lead to a deal, debt issued by its four
largest banks remained below 40 cents on the euro, according to
data complied by Bloomberg.
The prices suggest investors expect banks to restructure
debt after the country’s economic crisis spurred depositors to
withdraw about 40 billion euros between December and June.
The finance chiefs also rebuffed any talk of debt relief, a
step that the IMF has backed.
“Debt relief is impossible,” Germany’s Wolfgang Schaeuble
said on his way into Saturday’s meeting.
The country’s three creditor institutions -- the IMF, the
European Commission and the European Central Bank -- earlier
assessed the program positively as a basis for the bailout,
according to a euro-area official who spoke on condition of
anonymity.
Moscovici’s Hope
“There’s always hope,” European Union Economic Affairs
Commissioner Pierre Moscovici told reporters.
The schedule for the summits of both the euro-area and
European Union leaders will be determined by EU President Donald
Tusk after meeting Dijsselbloem Sunday morning.
The creditors still view the country’s reform proposals as
insufficient to meet fiscal targets, Frankfurter Allgemeine
Sonntagszeitung said, citing an assessment paper provided to
euro-area finance ministers.
Tsipras faces political antagonists not just in Berlin and
Brussels but within his own party. More than a dozen Syriza
members refused to back the plan, with some of them denouncing
the harsh measures it prescribes less than a week after Tsipras
won an anti-austerity referendum. The prime minister said after
the vote that his priority would be to complete negotiations
with the creditors on a bailout deal.
“It could have been better,” Spain’s Luis de Guindos said
as he left the talks. “But it could have been worse.”
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 Corina Ruhe, Jonathan Stearns, Esteban
Duarte, Patrick Donahue, Kevin Costelloe and Rebecca Christie in
Brussels and Nikos Chrysoloras and Marcus Bensasson in Athens.
To contact the reporters on this story:
Karl Stagno Navarra in Brussels at +39-645-206-300 or
ksnavarra@bloomberg.net;
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
To contact the editors responsible for this story:
James Hertling at +44-20-3525-9330 or
jhertling@bloomberg.net
Richard Bravo
2015-07-11 23:13:16.253 GMT
(Adds comment from Finland’s Stubb in seventh paragraph.
For more on the Greek crisis, click here.)
By Karl Stagno Navarra, Radoslav Tomek and Ott Ummelas
(Bloomberg) -- European finance ministers deadlocked over
how to keep Greece in the euro, forcing emergency talks to
continue Sunday and threatening to delay the infusion Prime
Minister Alexis Tsipras desperately needs.
With Greece running out of money and its banks shut for the
past two weeks, the hardline group led by Germany signaled that
the country’s debt was too great, Tsipras’s reform proposals
were inadequate and, in any event, the Greeks couldn’t be
trusted to keep their word. Finance ministry aides will work
through the night, allowing finance chiefs to reconvene at 11
a.m. in Brussels before a leaders’ summit.
“It’s still very difficult, but work is still in
progress,” Dutch Finance Minister Jeroen Dijsselbloem, the head
of the Eurogroup, told reporters after nine hours of talks that
ended at midnight. “The issue of credibility and trust was
discussed and also, of course, the financial issues.”
The skepticism expressed by the policy makers came hours
after Tsipras won overwhelming support in the Greek Parliament
for a package of spending cuts, pension savings and tax
increases intended to win financial aid of at least 74 billion
euros ($83 billion). Among its shortcomings, the proposals
failed to reflect the economic deterioration since talks
collapsed and capital controls were imposed two weeks ago,
according to Dijsselbloem.
Their concerns were reflected by the media back home.
Germany’s Frankfurter Allgemeine Sonntagszeitung reported a
finance ministry proposal to suspend Greece from the euro area
for five years. The idea was dismissed as illegal and nonsense
by a European Union official who asked not to be named because
the talks are private.
Finnish media reported the Helsinki government flatly
opposed the bailout.
Finland’s Opposition
“I don’t believe that we are at this point authorising any
kind of additional loan to Greece,” Finland’s Alexander Stubb
said. “About half of members had the same stance as us and
maybe a few had another view.”
Greece and its creditors are struggling for common ground
after Tsipras missed a payment to the International Monetary
Fund June 30 and allowed its second rescue package to lapse the
same day. A new bailout will be Greece’s third in five years.
The five-month standoff between the former communist
student leader, whose party translates to Coalition of the
Radical Left, and his creditors deepened the country’s economic
misery. Bank withdrawals are limited to 60 euros a day, pensions
have been rationed and commerce is grinding to a halt.
Economic Abyss
“The Greek economy is moving closer to the abyss,”
Slovakia’s Peter Kazimir said before the meeting began.
While Greek government bonds rallied on Friday on optimism
Tsipras’s package would lead to a deal, debt issued by its four
largest banks remained below 40 cents on the euro, according to
data complied by Bloomberg.
The prices suggest investors expect banks to restructure
debt after the country’s economic crisis spurred depositors to
withdraw about 40 billion euros between December and June.
The finance chiefs also rebuffed any talk of debt relief, a
step that the IMF has backed.
“Debt relief is impossible,” Germany’s Wolfgang Schaeuble
said on his way into Saturday’s meeting.
The country’s three creditor institutions -- the IMF, the
European Commission and the European Central Bank -- earlier
assessed the program positively as a basis for the bailout,
according to a euro-area official who spoke on condition of
anonymity.
Moscovici’s Hope
“There’s always hope,” European Union Economic Affairs
Commissioner Pierre Moscovici told reporters.
The schedule for the summits of both the euro-area and
European Union leaders will be determined by EU President Donald
Tusk after meeting Dijsselbloem Sunday morning.
The creditors still view the country’s reform proposals as
insufficient to meet fiscal targets, Frankfurter Allgemeine
Sonntagszeitung said, citing an assessment paper provided to
euro-area finance ministers.
Tsipras faces political antagonists not just in Berlin and
Brussels but within his own party. More than a dozen Syriza
members refused to back the plan, with some of them denouncing
the harsh measures it prescribes less than a week after Tsipras
won an anti-austerity referendum. The prime minister said after
the vote that his priority would be to complete negotiations
with the creditors on a bailout deal.
“It could have been better,” Spain’s Luis de Guindos said
as he left the talks. “But it could have been worse.”
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 Corina Ruhe, Jonathan Stearns, Esteban
Duarte, Patrick Donahue, Kevin Costelloe and Rebecca Christie in
Brussels and Nikos Chrysoloras and Marcus Bensasson in Athens.
To contact the reporters on this story:
Karl Stagno Navarra in Brussels at +39-645-206-300 or
ksnavarra@bloomberg.net;
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
To contact the editors responsible for this story:
James Hertling at +44-20-3525-9330 or
jhertling@bloomberg.net
Richard Bravo