Greece crisis: Greeks dismiss report on preparing IOUs to pay state wages, pensions
Published 08/07/2015 | 02:30
Greece's finance ministry has dismissed a newspaper report that the country was preparing to issue a second currency to pay state pensions and wages and the end of the July.
Citing unidentified sources, Kathimerini newspaper reported that Greece's General Accounting Office was preparing issuing IOUs, known as warrants, to pay the wages and pensions of state workers at the end of the month if there was no deal between Greece and its lenders by then.
"The report is totally baseless. Such reports are directed against the country and considered dangerous at a time when negotiations with creditors partners are at a crucial point," the finance ministry said in a statement.
Greek Prime Minister Alexis Tsipras, who will address the European Parliament today, won a commitment to seek a last-minute rescue at an emergency eurozone summit yesterday, before his country's banks run out of money.
Italian Prime Minister Matteo Renzi told reporters that EU leaders would hold a further summit on Sunday to approve a plan to aid Greece if creditor institutions are satisfied in the meantime with a Greek loan application and reform commitments.
"The ball is in Greece's court," Renzi said. "Next Sunday the final meeting will take place on Greece."
German Chancellor Angela Merkel, who arrived in Brussels saying there was still no basis for reopening negotiations with Athens, changed her tune in the room and was actively involved in efforts to find a last-ditch solution, sources said.
"It is not a matter of weeks but of a few days" to save Greece from collapse, Ms Merkel told reporters on arrival.
With Greek banks down to their last few days of cash and the European Central Bank tightening the noose on their funding, Mr Tsipras tried to convince the eurozone's other 18 leaders to authorise a new loan swiftly.
People familiar with Greece's financial system said the banks could start running out of money within two days unless there was an international rescue.
However, eurozone sources in Brussels said ECB President Mario Draghi had assured finance ministers that the central bank would keep Greek lenders afloat this week as long as negotiations were under way.
Ms Merkel and French President Francois Hollande worked together on a plan to save Greece from plunging into economic turmoil and possibly having to ditch the euro. This involved a medium-term conditional programme and a short-term interim financing deal for a few months, the sources said.
Mr Hollande said: "Greece must make serious, credible proposals. We need speed. It's this week that the decisions have to be taken."
However, a solution still depends on Mr Tsipras putting forward convincing reform proposals and rushing key measures through parliament by the weekend to make Greece's public finances sustainable.
If he does that, bridge financing could be provided by "Greece's friends" and by releasing past ECB profits on Greek bonds, to prevent Athens from missing a crucial €3.5 billion bond redemption to the ECB on July 20, the sources said.
Some of Athens' 18 partners in Europe's common currency vented exasperation at five years of crisis wrangling with Greece. Lithuanian President, Dalia Grybauskaite, complained: "With the Greek government it is every time 'mañana'."
The Lithuanian president, accused the Greeks of "playing poker".
Eurozone finance ministers complained that their new Greek colleague, Euclid Tsakalotos, while more courteous than his abrasive predecessor, Yanis Varoufakis, had brought no new proposals to a preparatory meeting before the summit.