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Draghi and Lagarde head to Berlin for talks on Greek debt Merkel calls in Draghi and Lagarde for Greek debt talks
(35 minutes later)
The chiefs of the European Central Bank and the International Monetary Fund have headed to Berlin for talks with the leaders of France and Germany on how to proceed with Greek debt negotiations. Related: Greece's creditors hold emergency meeting as endgame looms - live updates
European Union officials said the ECB chief, Mario Draghi, and Christine Lagarde of the IMF were joining the German and French leaders, and the president of the European commission late on Monday with the aim of reaching a joint position on how to negotiate with Greece. The German chancellor Angela Merkel moved to try to defuse Greece’s financial and European crisis late on Monday, converting a routine long-scheduled meeting with French and EU leaders into a mini-summit on Greece that was said to be preparing a final response to Athens’ intractable debt dilemmas.
The unexpected development came after the Greek prime minister, Alexis Tsipras, fired a broadside at international creditors, which officials said bore little resemblance to his private talks with EU leaders. Merkel met France’s president François Hollande and the president of the European commission, Jean-Claude Juncker, for what was billed as a session on how to boost investment in the EU. But they were joined by Mario Draghi, the president of the European Central Bank, and Christine Lagarde, the head of the International Monetary Fund, in what turned into a late-night session on Greece.
The eurozone has set a deadline of Friday to conclude the slow-moving talks to allow time for institutions and ministers to approve a deal and secure parliamentary backing to disburse frozen aid before Greece’s bailout expires at the end of June. Athens is facing insolvency and payments of €1.6bn (£1.1bn) to the IMF within the next few weeks, with the first payment of €300m due by Friday. Now it appears that the Greek drama is shifting up a gear, heading for its denouement, after five months of negotiations between the Greeks and its eurozone/IMF creditors going nowhere.
In an article in the French daily Le Monde, which European diplomats said appeared intended to show Greek voters how hard he was fighting, Tsipras accused the lenders of making “absurd proposals” and disregarding Greek democracy. Merkel’s staff let it be known that the chancellor wanted the mini-summit in Berlin to deliver a “final offer” to Athens, German public television reported. “The creditors want to agree a common position tonight,” ZDF television said. Merkel wanted the deal sealed before a meeting this weekend in Germany of the G7 countries. Whether the terms of the proposed resolution represented an ultimatum to Greece was unclear.
Tsipras wrote: “The lack of an agreement so far is not due to the supposed intransigent, uncompromising and incomprehensible Greek stance. It is due to the insistence of certain institutional actors on submitting absurd proposals and displaying a total indifference to the recent democratic choice of the Greek people.” The meeting began in Berlin at 9.30pm local time and was expected to last until the early hours of Tuesday. Die Welt newspaper quoted German government officials as saying: “The endgame is beginning. The meeting is aimed at making the Greeks a final offer.”
Athens is due to make a €300m (£215m) repayment to the IMF on Friday amid growing doubts about its ability to meet all this month’s financial obligations. Both sides remain far apart on key sticking points of the bailout terms, with the eurozone and the IMF insisting on liberalising pledges on labour markets, collective wage bargaining, pension systems and privatisation from the Greeks in return for releasing a final €7.2bn in bailout funds that would tide Greece over for most of the summer. It would then pave the way for further negotiations on a third rescue package for Greece which might involve a writedown of the country’s unsustainable debt.
Officials close to the talks between Greece and the commission, the ECB and IMF earlier dismissed market rumours of an imminent announcement of a deal. While it remained unclear what, if anything, the Berlin session would offer Greece, the very fact of its taking place represented a victory of sorts for Alexis Tsipras, the leftwing Greek prime minister elected in January with a mandate to overthrow five years of eurozone – and German-dictated – austerity.
On Monday evening, the German chancellor, Angela Merkel, France’s President François Hollande and the commission president, Jean-Claude Juncker, gave brief statements before meeting in Berlin to discuss the digital economy but made no mention of Greece In a lengthy broadside published at the weekend in Le Monde, Tsipras denounced the eurozone for making “absurd” demands on Greece, predicted that the creditor governments’ demands of Athens would lead to the break up of the EU, would destroy democracy in Europe and render elections in countries being bailed out pointless.
The tirade by Tsipras came despite daily pronouncements from Athens that Greece and the eurozone were on the brink of a settlement. But Tsipras insisted that the crisis had moved beyond the level of financial and technocratic negotiations and would need to be resolved at the level of EU political leaders. Monday night’s session of eurozone and IMF leaders appeared to vindicate that position.
The Greek prime minister’s bold move at the weekend appeared to be aimed at forcing Merkel to make up her mind over whether or not she was prepared to see Greece crash out of the single currency zone. Both sides appeared to be locked in an escalating exercise in brinkmanship that would need to be resolved one way or another by national leaders.