Friday 30 September 2016

Greece crisis: Eurozone finance ministers refuse Greek request to extend bailout programme

Published 27/06/2015 | 16:36

Greek Prime Minister Alexis Tsipras leaves the Maximos Mansion after a governmental council in Athens, Greece REUTERS/Marko Djurica
Greek Prime Minister Alexis Tsipras leaves the Maximos Mansion after a governmental council in Athens, Greece REUTERS/Marko Djurica
Greek Prime Minister Alexis Tsipras is seen on a television monitor whille addressing the nation early June REUTERS/Pool
People line up at an ATM outside a National Bank branch in Athens, Greece REUTERS/Yiannis Panagopoulos/Eurokinissi

Eurozone finance ministers have rejected a request by Greece to extend the deadline of its bailout programme until after a planned July 5 referendum.

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Two eurozone officials said finance ministers would continue meeting in an informal session in Brussels without Greek Finance Minister Yanis Varoufakis.

Greek State Minister Nikos Pappas talks to journalists outside the Maximos Mansion in Athens, Greece REUTERS/Alkis Konstantinidis
Greek State Minister Nikos Pappas talks to journalists outside the Maximos Mansion in Athens, Greece REUTERS/Alkis Konstantinidis
People line up at an ATM outside a National Bank branch in Athens, Greece REUTERS/Yiannis Panagopoulos/Eurokinissi
Greek prime minister Alexis Tsipras leaves the Maximos Mansion after he announced the bailout referendum (AP)
Greek ministers leave the Maximos Mansion after a governmental council in Athens, Greece REUTERS/Marko Djurica

One official said "there could not be an extension of the programme now because there was no basis for cooperation".

In a statement issued this evening, the European Central Bank said it's governing council was meeting to discuss the situation, and the ECB will continue to monitor developments.

Many among the 19 eurozone ministers said that they were surprised and disappointed by the announcement of Prime Minister Alexis Tsipras to seek a referendum on the creditors' latest proposal for a bailout.

The Greek parliament says members will vote on the referendum at about 7pm local time.

The proposal is made up of two documents - one called Reforms For The Completion Of The Current Programme And Beyond and another called Preliminary Debt Sustainability Analysis.

Aside from the issue of making these documents accessible to all voters, the parliament must also deal with the possibility of creditors withdrawing those proposals at a Eurogroup meeting later today.

Germany's vice chancellor said that a Greek referendum on the bailout talks could in principle make sense, but that it should be clear to voters what they will be deciding on.

Sigmar Gabriel said: "We would be well-advised not simply to push this proposal from Mr Tsipras aside and say that it's a trick. If the questions are clear - if it's really clear that they are voting on a programme that has been negotiated, it could make sense."

Mr Gabriel added: "There must be a clear programme. And what he (Tsipras) would like - for Europe to send 20 or 30 billion in aid programmes to Greece, but without any conditions - Europe cannot accept."

He said that "Europe is offering a great deal" and that "many of the tough measures that were being debated at the beginning are off the table".

He pointed to EU efforts to invest in growth, softening the previous focus on austerity.

Across Athens, people started flocking to cash machines shortly after Mr Tsipras announced the referendum, just after 1am local time. The length of queues at cash machines, and the availability of cash, varies widely. The Bank of Greece promised that the flow of cash to ATMs will not be interrupted.

The Greek government said it would recommend Greeks vote "no" in the referendum. What would happen in that case - whether Greece would have to leave the euro or try to renegotiate more time with creditors - is unclear.

Former prime minister Costas Karamanlis broke a long-standing silence and severely criticised the government's "foolish choice".

"The nation's most vital interests demand that the country remains at the heart of Europe. The EU's actual shortcomings do not, in any way, negate this ..." Mr Karamanlis said.

"Foolish choices that undermine this principle push the country to adventures, with unpredictable and possibly irreversible consequences," he added.

Panagiotis Lafazanis, a senior Syriza minister overseeing the energy sector, environment and agriculture, came out strongly against approving the creditors' proposal.

"A 'No' will provide a big respite for Greece and the Greek people," he said as he arrived at the Parliament. "It will be a big yes to a new era of reconstruction and progress."

The Netherlands cautioned against granting any more time to Greece, which faces a debt deadline on Tuesday, when it has a 1.6 billion euro (£1.13 billion) repayment to make and its bailout programme expires.

Dutch state secretary Eric Wiebes said before the start of a eurozone finance ministers' meeting: "I see no reason for delay. The positions are very clear. We have known the deadline for four months."

The eurozone's top official, Jeroen Dijsselbloem, warned that Greece has closed the door on further talks to end the stand-off with its creditors because it called for a referendum on the proposals with an advice to reject them.

He said before entering the eurozone finance ministers' meeting: "I am very disappointed. After our last meeting, the door on our side was still open, but that door has closed on the Greek side."

However, the head of the International Monetary Fund said that Greece's creditors "will continue to work" for a deal to save the country.

Christine Lagarde said that the creditors "always showed flexibility to adjust to the new political and economic situation in Greece," thus rejecting claims from Mr Tsipras that his country was facing an ultimatum.

But Ms Lagarde insisted Greece needs to do more. "It requires a balanced approach, on the one hand there has to be structural reforms, deep ones, to change the Greek economy, to make it more productive, more efficient so that it generates growth and jobs," she said.

Once that is done, "it requires financial support" from the international partners, she added.

France's finance minister Michel Sapin said his country is ready to act as a go-between between Greece and its international creditors to avoid a further collapse of the bailout negotiations and find a belated agreement.

"France is available today, tomorrow, the day after, as from the start, to be a go-between to find an agreement that is solid," MSapin said. "I say it with conviction: France is today ready to make sure that at any time the dialogue can resume."

Greece's finance minister says there is still a chance his country could reach a bailout deal with creditors, despite the latest breakdown in talks.

Greece's finance minister Yanis Varoufakis also held out the prospect of reaching a deal on the bailout saying there is still the "possibility of negotiating through the day and through the night and through the day ahead of us in the coming days to improve the agreement".

Read more here: Europe is entering 'unchartered waters' with Greek referendum, Finance Minister Michael Noonan warns  

Read more here: Greece's Alexis Tsipras calls referendum to break bailout deadlock  

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