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| Alexis Tsipras to face take-it-or-leave-it ultimatum from lenders over debt offer | |
| (about 4 hours later) | |
| The Greek prime minister Alexis Tsipras will be presented with what is expected to be a take-it-or-leave-it plan on Wednesday after five months of drama-filled negotiations to keep his debt-stricken country afloat. | |
| The radical left leader is to be given the ultimatum after lenders at the EU, European Central Bank (ECB) and International Monetary Fund (IMF) agreed on the contours of a cash-for-reform deal late Tuesday. | |
| The agreement, reached after emergency talks in Berlin on Monday, would unlock €7.2bn (£5.2bn) in rescue loans for the cash-strapped country but demand tough economic reforms in return. | |
| “It covers all key policy areas and reflects the discussions of recent weeks,” a senior EU official said on Tuesday. “It will be discussed with Tsipras [on Wednesday].” | |
| Athens’ anti-austerity leader was scheduled to fly to Brussels at the request of EU commission president Jean-Claude Juncker, a Greek government official said. “The prime minister will be in Brussels [on Wednesday] with the Greek proposal in his luggage,” said the official on Tuesday night, suggesting the bargaining was far from over for Tsipras’ far-left government. | |
| Both the German chancellor Angela Merkel and the French president, François Hollande, were also expected to put the blueprint to Tsipras in a bid to win his acceptance by Friday when Greece must pay the first in a series of loan installments to the IMF. | |
| The accord ends months of stalemate in the wake of the election of Tsipras’ anti-bailout Syriza party in January. | |
| But whether Greece’s anti-austerity government will accept the offer remains in doubt. Taking a defiant stance earlier on Tuesday, Alexis Tsipras said: “We have submitted [our own] realistic plan for Greece to exit the crisis. A realistic plan, whose acceptance by the institutions, our lenders and our partners in Europe will mark the end of the scenario of divisions in Europe.” | |
| He said it was now up to the bloc’s political leadership to decide whether it wanted “to adjust to realism”. | He said it was now up to the bloc’s political leadership to decide whether it wanted “to adjust to realism”. |
| Sources suggested the 47-page proposal had been submitted by Athens before Merkel convened Monday’s mini-summit of protagonists in Europe’s debt drama. Hollande, Juncker, and the heads of the ECB and IMF, Mario Draghi and Christine Lagarde, would all have seen it, they said. | |
| Related: Greece bailout talks: an intractable crisis with three possible outcomes | Related: Greece bailout talks: an intractable crisis with three possible outcomes |
| Faced with empty coffers and debt repayments worth €1.6bn to the IMF this month alone, crunch time has come for Greece. Failure to honour loan instalments would automatically lead to default and a euro exit. The Washington-based IMF is expecting a first repayment of €300m to be made this Friday. | Faced with empty coffers and debt repayments worth €1.6bn to the IMF this month alone, crunch time has come for Greece. Failure to honour loan instalments would automatically lead to default and a euro exit. The Washington-based IMF is expecting a first repayment of €300m to be made this Friday. |
| Last week, the national economy minister, George Stathakis, said Athens would utilise internal resources to ensure the bill was paid. But ratcheting up the pressure on Tuesday, a Greek government official implied that the country might think twice if an agreement with creditors had still not been concluded. “If we judge that a deal has been sealed, then we will make the 5 June payment normally,” he said, explaining that even if a preliminary agreement had not been approved by eurozone finance ministers the money would still be transferred. | Last week, the national economy minister, George Stathakis, said Athens would utilise internal resources to ensure the bill was paid. But ratcheting up the pressure on Tuesday, a Greek government official implied that the country might think twice if an agreement with creditors had still not been concluded. “If we judge that a deal has been sealed, then we will make the 5 June payment normally,” he said, explaining that even if a preliminary agreement had not been approved by eurozone finance ministers the money would still be transferred. |
| The countdown to possible economic Armageddon was infused with yet more tension as eurozone officials disagreed over the degree to which progress had been made. A French presidency official, speaking after Monday night’s talks, hinted that creditors were still at odds over the terms of a deal. Others, including the Dutch finance minister, Jeroen Dijsselbloem – who chairs the Eurogroup of euro area finance ministers – continued to blame the lack of headway on Athens. “There is some progress, but it’s really not enough,” he told Dutch television. | The countdown to possible economic Armageddon was infused with yet more tension as eurozone officials disagreed over the degree to which progress had been made. A French presidency official, speaking after Monday night’s talks, hinted that creditors were still at odds over the terms of a deal. Others, including the Dutch finance minister, Jeroen Dijsselbloem – who chairs the Eurogroup of euro area finance ministers – continued to blame the lack of headway on Athens. “There is some progress, but it’s really not enough,” he told Dutch television. |
| The primary budget surplus Greece must sign up to is believed to remain at the heart of the discord between the two, along with pension reforms and labour deregulation. | The primary budget surplus Greece must sign up to is believed to remain at the heart of the discord between the two, along with pension reforms and labour deregulation. |
| Greece’s outspoken finance minister, Yanis Varoufakis, has argued a primary surplus above 1% will simply exacerbate Athens’ debt deflationary spiral after six years of austerity-fuelled recession. The nation’s debt-to-GDP ratio stands at 180% – the highest in the EU. | Greece’s outspoken finance minister, Yanis Varoufakis, has argued a primary surplus above 1% will simply exacerbate Athens’ debt deflationary spiral after six years of austerity-fuelled recession. The nation’s debt-to-GDP ratio stands at 180% – the highest in the EU. |
| Related: EU leaders stage late-night mini-summit to try to defuse Greek crisis | Related: EU leaders stage late-night mini-summit to try to defuse Greek crisis |
| Mounting dissent from within Tsipras’ Syriza party – catapulted into office in January on the back of promises to scrap foreign-imposed budget cuts – has deepened the uncertainty and added to speculation over whether a deal is possible. | Mounting dissent from within Tsipras’ Syriza party – catapulted into office in January on the back of promises to scrap foreign-imposed budget cuts – has deepened the uncertainty and added to speculation over whether a deal is possible. |
| The young premier has come under growing pressure from hardliners rattled that the government has already made too many concessions to creditors. | The young premier has come under growing pressure from hardliners rattled that the government has already made too many concessions to creditors. |
| Amid talk of fresh elections – on a day punctuated by fiery rhetoric – the country’s usually mild-mannered deputy leader, Yannis Dragasakis, insisted that any deal would have to include a roadmap to debt sustainability. After being impoverished by belt-tightening, he said, Greeks could not bear any more austerity. | Amid talk of fresh elections – on a day punctuated by fiery rhetoric – the country’s usually mild-mannered deputy leader, Yannis Dragasakis, insisted that any deal would have to include a roadmap to debt sustainability. After being impoverished by belt-tightening, he said, Greeks could not bear any more austerity. |
| “As a government we do not accept ultimatums, nor do we surrender to blackmail,” tweeted the former communist, who is now in charge of the coalition’s economic policy. | “As a government we do not accept ultimatums, nor do we surrender to blackmail,” tweeted the former communist, who is now in charge of the coalition’s economic policy. |
| The debt crisis, which has seen the Greek economy contract by a depression-era 26%, has also triggered record levels of joblessness and poverty, prompting senior Syriza figures to say that any compromise will have to be honourable. | The debt crisis, which has seen the Greek economy contract by a depression-era 26%, has also triggered record levels of joblessness and poverty, prompting senior Syriza figures to say that any compromise will have to be honourable. |
| “If a deal is achieved that is not deemed honourable and promoting of compromise, the people will have to be asked before we sign it,” the labour minister, Panos Skourletis, told SKAI TV. “When you are elected you are not given carte blanche.” | “If a deal is achieved that is not deemed honourable and promoting of compromise, the people will have to be asked before we sign it,” the labour minister, Panos Skourletis, told SKAI TV. “When you are elected you are not given carte blanche.” |
| Several politicians suggested that polls could be held on 28 June. A second scenario – one that could be prompted by lenders deciding on a short-term deal that would tide Greece over a summer of heavy debt repayments – might also involve a referendum. | Several politicians suggested that polls could be held on 28 June. A second scenario – one that could be prompted by lenders deciding on a short-term deal that would tide Greece over a summer of heavy debt repayments – might also involve a referendum. |