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Eurogroup talks to resume on Saturday after failure to bridge differences I Kathimerini, Athens, June 25 (Associated Press) <http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_25/06/2015_551509> Talks between Greece and its eurozone partners broke up Thursday without agreement, intensifying doubts about whether Athens can make a crucial debt payment due in just a few days. The negotiations will resume Saturday. Finance ministers from the 19 nations using the euro currency failed to bridge differences over the kinds of reforms that Greeces radical left government must implement to qualify for billions in new loans. It was the latest in a series of negotiating road blocks, and a major setback since there had been hopes to reach a deal in time for European leaders to approve it at a summit later in the day. "Eurogroup back later, but not today," Finland's finance minister, Alexander Stubb, tweeted as the talks broke up. Two EU officials, who declined to be named while deliberations were ongoing, said that the ministers would meet again on Saturday. The blockage happened after leaders from the International Monetary Fund, the European Central Bank and the European Commission raised the stakes by putting forward their joint position on the reforms they would accept to offer Greece a financial lifeline. But Greece was still not on board, and wanted to stick to a previous plan it has offered. A Greek government official said that Athens remains "steadfast in support of the proposals" the country had made earlier in the week. Greeces most influential creditor, Germany, had never been optimistic about a breakthrough Thursday. The Greek government so far has "not moved, rather moved backward, and so I am not very confident for our meeting today," said German Finance Minister Wolfgang Schaeuble as he arrived for the eurozone meeting. He said nothing new is on the table and added that "there is a bigger difference rather than a coming together." Schaeuble insisted that "the decision lies exclusively with those responsible in Greece." Greek Prime Minister Alexis Tsipras was under pressure to seal a deal before facing other European Union leaders at the summit. But he is also under massive pressure from Greeks themselves as the compromises suggested so far will mean fresh hardship for citizens already suffering the impact of past austerity measures to bring public spending into line. According to Greek officials at the talks, creditors are seeking a different mix of austerity measures than those proposed by Athens, making the cuts more immediate. They include broad pension cuts, higher revenue from sales tax, and a faster elimination of tax exemptions — demands that are likely to fuel dissent within the government if accepted. Representatives from almost every Greek party were in Brussels, following developments blow by blow, to see whether they would be able to back any new deal in the Greek parliament, where a vote must pass by Monday. "We are at a critical moment," Greek Labor Minister Panos Skourletis warned on private Antenna television. "There are issues that for us are paramount — that must be included in an agreement. These are tackling the debt so that it can go on a sustainable course, and the financing of the economy," he said. A senior lawmaker in Tsipras' radical left governing party, Nikos Filis, denounced the international demands for new spending cuts as "blackmail." Greece has a 1.6 billion-euro ($1.8 billion) debt to pay on Tuesday which it cannot afford unless the creditors unfreeze 7.2 billion euros (8.1 billion dollars) in bailout money. A failure to reach agreement with its creditors and a default on its debts could force Greece out of the eurozone, which would be hugely painful for the country. Some experts say it could be manageable for Europe and the world economy, but that remains unclear and any failure would likely shake global markets. Amid the uncertainty over Greeces future, bank deposit holders have been pulling money out of the banks. That has forced the European Central Bank to increase emergency credit to the Greek banks on a daily basis since last week. Experts say that if Greece does not reach a deal, it could have to put limits on money withdrawals soon. Miranda Xafa, senior fellow at the Center for International Governance Innovation and a former IMF official, said that the talks were now "more a matter of signing a deal, even a painful deal" that would cover Greece for three to nine months. If no deal is struck quickly, she said, Greece could see "capital controls as early as next week." . . . Lorne Cook in Brussels, Elena Becatoros in Athens and David McHugh in Frankfurt, Germany, contributed to this report. Italian PM Renzi: ‘EU Countries Pressured to Force Grexit’ by Ioanna Zikakou The Greek Reporter, June 25 <http://greece.greekreporter.com/2015/06/25/italian-pm-renzi-eu-countries-pressured-to-force-grexit> There are countries within the Eurozone pushing for Greece’s exit from the monetary union, warned Italian Prime Minister Matteo Renzi, admitting that Greece’s partners want the Grexit to happen. Greek people and the Greek government need to know that there is a lot of pressure to follow the public opinion, especially in some countries, to use this window as an opportunity to settle the differences with Greece and put an end to its presence in the Eurozone, said Matteo Renzi, speaking at the Italian Senate before the critical meeting on Wednesday, June 24. The Italian leader even hinted that not only West European EU members, but also Eastern European countries are pushing for Greece’s exit from the Eurozone. As he noted, he was not only referring to the older EU members, but also to countries that joined the union later. The Italian leader assured however that most institutional and political leaders within the EU are prepared to “do everything in the power” in order to help Greece. He noted, however, that Athens also needs to make an effort and to commit to implementing significant economic reforms. Finally, Renzi stressed that the deadline for reaching an agreement between Greece and its creditors ends in late June. Greek bailout talks postponed to Saturday by Peter Spiegel, Anne-Sylvaine Chassany and Stefan Wagstyl in Brussels Financial Times, June 25 <http://www.ft.com/intl/cms/s/0/b54f3bba-1b12-11e5-a130-2e7db721f996.html#axzz3e6PQFlxT> EU leaders, having tripped over multiple deadlines for Greece to accept a reform plan to unlock €7.2bn in bailout aid, set Saturday as Athens’ last chance to strike a deal or trigger a “plan B” that would attempt to prevent a Greek default from damaging the rest of the eurozone. The Saturday meeting of eurozone finance ministers was scheduled after the group failed for a fourth time in a week to find common ground with Athens despite marathon overnight talks in Brussels between Alexis Tsipras, the Greek prime minister, and heads of his country’s creditor institutions. The talks collapsed on Thursday morning after the bailout monitors — the European Commission, International Monetary Fund and European Central Bank — demanded Mr Tsipras accept a compromise proposal or have the plan presented as a “take it or leave it” offer before the finance ministers. Creditor plans were thwarted, however, by Yanis Varoufakis, the Greek finance minister, who presented his own proposal — described by officials as the creditors’ plan with edits — which the ministers then agreed to assess before cutting off talks completely. Still, multiple officials said there was no chance of creditors accepting the new Greek proposal and that they were readying plans to “ring fence” Greece so any economic upheaval unleashed by a default would not spread. Those plans are believed to include capital controls and even humanitarian aid. The bleakness of the situation was underlined during the finance ministers’ meeting on Thursday when a handful of participants, led by Wolfgang Schäuble, the German finance minister, told colleagues they believed the creditors’ compromise plan was too lenient, leaving no more room for concessions to Athens. “There is no convergence, there is absolutely no convergence,” said one senior eurozone official. “It is looking bleak.” Another eurozone official said the inability of finance ministers to reach an agreement meant “it’s up to the leaders now”. But aides to several prime ministers said Angela Merkel, the German chancellor, wanted the issue handled by finance ministers despite Mr Tsipras’ desire to negotiate among his colleagues. “In some areas, you have the impression that we have even gone backwards a bit,” Ms Merkel said as she arrived for a Brussels summit of all 28 EU leaders. The creditors’ plan presented to the eurogroup[see below], a copy of which was obtained by the Financial Times, makes some concessions to Athens, but largely sticks to exacting creditor demands for greater savings on pensions, the key bone of contention. It would require Athens to increase the retirement age to 67 by 2022 and phase out a special “solidarity grant” given to poorer pensioners by the end of 2019. Without an agreement this weekend, there will not be enough time for the economic reform measures to be passed by the Greek parliament and have the programme extended before it expires on Tuesday. Several eurozone parliaments, including the German Bundestag, must approve any bailout extension. Greek ministers have said they will not be able to make a €1.5bn loan repayment to the IMF on Tuesday. If Athens defaults, pressure will mount on the ECB to reconsider emergency loans it has been approving despite fears of a bank run. Jens Weidmann, president of Germany’s Bundesbank, strongly criticised the ECB’s liquidity lifeline to the Greek banks on Thursday, saying it had become its only source of funding and “casts doubt on their financial solidity”. “It should be clear to all the parties to the current negotiations that the Eurosystem must not provide bridge financing to Greece even in anticipation of later disbursements,” the Bundesbank president said. “When banks without access to the markets buy debt of a sovereign which is likewise locked out of the market, taking recourse to ELA raises serious monetary financing concerns.” Additional reporting by Alex Barker in Brussels and Claire Jones in London CREDITORS' PROPOSALS Here is a link to the 5-page document containing the counter-proposals put forward by Greece's lenders on Wednesday. The document, first revealed by The Wall Street Journal, was met with profound skepticism from Greek officials. <http://s.kathimerini.gr/resources/article-files/062415greek.pdf> _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
