Summit resumes search for Greek deal

Greece debt crisis: Eurozone summit resumes search for deal

  • 12 July 2015
  • From the section Europe

A eurozone summit has resumed its work after being temporarily suspended to enable leaders to meet Greek PM Alexis Tsipras separately over a bailout deal.

Mr Tsipras met the German chancellor, the French president and the EU president, as they work to try and reach a deal by the end of Sunday.

Leaders are discussing new proposals put forward by their finance ministers.

A draft of the package suggests Greece could temporarily leave the eurozone if no agreement on a bailout is reached.

The four-page document says “Greece should be offered swift negotiations on a time-out from the euro area, with possible debt restructuring”.

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Another suggestion is the establishment of an independent fund in which to transfer “valuable Greek assets… to be privatised over time and decrease debt”.

The document notes that Greece has agreed to introduce new legislation by Wednesday of a raft of new reforms on VAT and pensions among others.

It also says the Greek government would carry out “ambitious” reforms to pensions and labour markets, “significantly” scale up its privatisation programme and “strengthen the financial sector”.

The document noted that the amount of the new bailout could reach €86bn, far exceeding the €53.5bn ($ 59.47bn; £38.4bn) Greece is seeking to cover its debts until 2018.

Analysis: Laurence Peter, BBC News

Chancellor Merkel and other eurozone leaders say there can be no third bailout unless trust is restored with the leftist Greek government.

After months of delay and political upheaval in Greece this is a make-or-break summit – not least because Greek banks are desperately short of cash.

A deal tonight could pave the way for a third bailout – but the process is fraught with uncertainty.

A deal would require Greece to enact laws immediately to reform its pension system, sales tax (VAT) and labour market.

Ambitious privatisation is required too – something that has been delayed for years.

But the Finnish and German parliaments have to vote even to allow new bailout talks to start.

The future of the euro is at stake – and that is concentrating minds.

Arriving for Sunday’s meeting, France’s President Francois Hollande dismissed any suggestion of a “time-out” for Greece.

“There is no temporary Grexit, there is a Grexit or there is not a Grexit,” he said, adding that he would “do everything to find a deal tonight”.

Mr Tsipras was also upbeat, telling reporters: “I’m here ready for an honest compromise… we can reach an agreement tonight if all parties want it.”

Mrs Merkel said the key requirement for her is that “the conditions are met” to start negotiations on a third bailout.

“That’s what is at stake, nothing more and nothing less,” she said.

But she warned that there would be “no agreement at any price”, adding: “We have to make sure the pros outweigh the cons – for Greece’s future, for the entire eurozone and the principles of our collaboration.”

The head of the European Parliament, Martin Schulz, said a deal was absolutely vital to the future of Europe.

“The alternative will be that over the next few years we are going to find ourselves in a catastrophic state of affairs as far as Greece is concerned,” he told a news conference in Brussels.

Greece in numbers


Greece’s debt mountain


European bailout

  • 177% country’s debt-to-GDP ratio

  • 25% fall in GDP since 2010

  • 26% Greek unemployment rate


The Greek government earlier this week set out a new list of austerity measures to try to secure the bailout.

They included many measures that had been rejected by the Greek people in a referendum a week ago.

As the talks drag on, Greece’s financial situation is close to collapse.

Greece fell into arrears on an International Monetary Fund repayment on 20 June and faces a €3bn payment to the European Central Bank on 20 July.

Banks have been closed for two weeks and a €60 daily limit on cash machine withdrawals, imposed on 28 June, remains in force for Greek citizens.

Economy Minister Giorgos Stathakis told the BBC on Saturday that if there was a deal, banks could reopen within the week, but he admitted it could take a “few months” to remove capital controls.

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