Tuesday 27 September 2016

Race to save Greece from economic collapse

Published 21/06/2015 | 02:30

Greek Prime Minister
Greek Prime Minister

The race to save Greece from economic collapse intensified last night as its beleaguered leader conducted a flurry of behind-the-scenes negotiations before an EU summit tomorrow that is expected to decide the country's fate.

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Alexis Tsipras, the prime minister, met senior officials in an attempt to devise a package of reforms that would secure emergency funds and avoid the nation defaulting on its massive debts. It will be the third such proposal that Athens has made to its creditors in as many weeks.

"We will try to supplement our proposal so that we get closer to a solution," Greece's Minister of State Alekos Flabouraris said. "We are not going [to the summit] with the old proposal. Some work is being done to see where we can converge, so that we achieve a mutually beneficial solution."

Flabouraris said Tsipras would also hold crucial talks with the head of the European commission Jean-Claude Juncker. The frantic diplomacy came as Greece's eurozone partners warned that, after five months of fruitless talks, the game was up for Tsipras's radical left-wing government.

The country, which has been thrown two lifelines since 2010, has until June 30 to secure €7.2bn in bailout funds. Failure to release the loans will result in default, as Greece owes €1.6bn to the IMF at the end of the month.

On Friday, the president of the European Council, Donald Tusk warned the situation was dire. Either Tsipras's anti-austerity government accepted painful reforms, reportedly at a cost of €5bn, he suggested, or it would go bust.

"We are close to the point where the Greek government will have to choose between accepting what I believe is a good offer of continued support or to head towards default," he said in a video message.

Speculation is rife that Greece's creditors at the EU, ECB and IMF would offer a six-month extension of the bailout programme - disbursing over €10bn in aid - if agreement was reached.

Athens's chief negotiator, Euclid Tsakalotos, described a short-term deal as perhaps the worst possible outcome.

© Observer

Sunday Independent

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