Business World

Sunday 18 February 2018

EU leaders summit cancelled as crisis talks resume over a potential third bailout for Greece

Greek Prime Minister Alexis Tsipras arrives at his office in Maximos Mansion in Athens
Greek Prime Minister Alexis Tsipras arrives at his office in Maximos Mansion in Athens

Niall O’Connor in Brussels

A planned summit involving all European Union leaders was cancelled this morning as crisis talks resume over a potential third bailout for embattled Greece.

European Council President Donald Tusk announced that a meeting of Eurogroup leaders will begin at 2pm and last “until we conclude talks with Greece”.

Greece’s future in the euro hangs in the balance as European leaders engage in what could be the most significant negotiations in years.

A lengthy and tense meeting of Eurozone finance ministers adjourned abruptly just after midnight without any agreement to enter bailout talks with the Greek Government.

An EU official said the meeting was fractious as a number of member states put up strong resistance to the prospect of a €70bn bailout for Greece.

"Nerves are very bad. The mood is very bad,” the official said just after 1am this morning.

During a day of extraordinary drama, member states lambasted the Syriza-led Government over its attitude during negotiations to date.

Finance Minister Michael Noonan was the first senior Government figure to warn Greek Prime Minister Alexis Tsipras that he must rebuild trust with the eurozone or face grave consequences.

But there was an unexpected twist after the Finnish Government refused to support a third bailout for Greece after it came under intense pressure back home.

It emerged that a coalition partner in the Finnish Government threatened to pull out - forcing its finance minister Alexander Stubb to adopt a harsh line.

Despite plans to extend the talks until the early hours, a decision was taken to adjourn until 11am this morning.

A source in the Irish Government said it proved "extremely difficult to find common ground".

Taoiseach Enda Kenny is en route to Brussels for a meeting of the heads of State at 4pm.

If the finance minister cannot agree a text to present at the 4pm meeting, the prospect of a Greek exit will increase further.

There is now effectively just hours to avert a doomsday scenario for Greece on Monday. Such a scenario would see emergency liquidity assistance (ELA) cut - causing unprecedented chaos in the markets.

Meanwhile, Irish officials are anticipating two possible outcomes as talks continue this afternoon.

The first will see a statement being produced at the end of the talks which outlines the basis for full formal discussions surrounding a third bailout for Greece.

Central to this is an agreement by Syriza to immediately pass legislation, even as early as tomorrow, which will legally bind the government into an agreement.

However, this could have major political ramifications for the left wing government, which has already haemorrhaged members of parliament. 

The second outcome is that finance ministers tell their respective leaders that the talks have entered stalemate and that no agreement can be reached.

"We are at a very serious juncture. The mood is downbeat, a source said.

There was cause for some optimism this morning after the Finnish Government appeared to shift its position.

Just hours after stating that he was prepared to block a bailout, Finnish finance minister Alexander Stubb said he now has a mandate from home.

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