Wednesday 29 March 2017

Eurozone leaders to hold emergency meeting on Monday to avoid Greek default

Greek Finance Minister Yianis Varoufakis listens to Prime Minister Alexis Tsipras addressing MP's and ministers at the Greek Parliament a few days ago
Greek Finance Minister Yianis Varoufakis listens to Prime Minister Alexis Tsipras addressing MP's and ministers at the Greek Parliament a few days ago

Eurozone leaders will hold an emergency summit on Monday to try to avert a Greek default after bank withdrawals accelerated and government revenue slumped as Athens and its international creditors remain deadlocked over a debt deal.

Finance ministers of the 19-nation currency bloc failed to make any breakthrough on a cash-for-reforms agreement at talks in Luxembourg yesterday, just 12 days before Greece must make a crucial debt repayment to the International Monetary Fund.

"Regrettably ... too little progress has been made. No agreement is in sight," Jeroen Dijsselbloem, chairman of the Eurogroup, told a news conference. Ministers sent a strong signal that it is up to Greece to make new proposals, he said.

The European Central Bank told the meeting it was not clear whether Greek banks would be open on Monday, officials said.

The ECB's governing council will hold a special conference call today - the second in three days - to consider adding more emergency liquidity for Greek banks facing a quickening drain on their cash, two persons close to the situation said.

European Council President Donald Tusk said in a statement he had summoned heads of state and government of the euro area to meet in Brussels at 1700 GMT on Monday to discuss Greece "at the highest political level".

IMF Managing Director Christine Lagarde said further dialogue was needed "with adults in the room".

Greece said it had put a "radical proposal" for budget monitoring on the table to show its willingness to reach a deal, Finance Minister Yanis Varoufakis said.

He accused his European peers of being dangerously close to accepting "an accident", saying they had refused to discuss his idea for braking public spending.

Dijsselbloem said if there was a last-minute deal next week, there would have to be some extension of the current bailout to allow time for disbursement.

Greek savers pulled out some 2 billion euros between Monday and Wednesday after weekend negotiations collapsed in Brussels, according to senior banking sources. That is double the amount that the ECB granted Greek banks in extra emergency liquidity assistance (ELA) only on Wednesday.

Asked at the Eurogroup meeting whether Greek banks would be open on Friday, ECB Executive Board member Benoit Coeure said: "Tomorrow, yes. Monday, I don't know," according to officials with knowledge of the talks.

Reuters

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