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Greek debt crisis: Tsipras concessions welcomed as 'good basis for progress' Greek debt crisis: Tsipras concessions welcomed as 'good basis for progress'
(about 4 hours later)
Related: Tsipras of Athens – a gripping drama entering its final act | Larry Elliott
Greece has submitted 11th-hour concessions to its creditors ahead of a crucial day of talks aimed at preventing it from crashing out of the eurozone.Greece has submitted 11th-hour concessions to its creditors ahead of a crucial day of talks aimed at preventing it from crashing out of the eurozone.
Its proposal followed a hectic round of telephone diplomacy on Sunday between Germany’s chancellor, Angela Merkel, the French president, Francois Hollande, and the European Commission president, Jean-Claude Juncker. The Greek prime minister Alexis Tsipras will sit down tonight with Germany’s chancellor Angela Merkel, French president François Hollande and other eurozone leaders to discuss proposals that were greeted by Greece’s creditors as “a reasonable basis” for discussions.
Juncker’s head of cabinet, Martin Selmayr, said the Athens proposal offered “a good basis for progress”, though he described the negotiations as a “forceps delivery”, underscoring the exertions to prevent Greece leaving the eurozone. Greece has given in demands for tax increases and reform of its pension system that would see the retirement age raised to 67, but it was unclear whether the concessions will go far enough for the biggest advocates of austerity.
A meeting between eurozone finance ministers to prepare the ground, broke up after little more than an hour, just four days after a meeting between the same group ended in mutual recrimination.
As the ministers arrived in the pouring rain in Brussels, hopes of an imminent breakthrough were already being played down.
Several finance ministers said on Monday that they had not had enough time to study the plans, while reports swirled that Greece had submitted the wrong draft late on Sunday night.
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Jeroen Dijsselbloem, the Dutch finance minister, who chairs the eurogroup, said there would be no final decision on the Greek proposals on Monday. “They’ve only come in very very recently so it will be impossible to have a final assessment.”
Alexander Stubb, Finland’s finance minister, complained that finance ministers and eurozone leaders had “wasted a lot of air miles” over Monday’s meetings. As the talks broke up he tweeted: “Work continues. Institutions assess proposals.”
Another eurogroup meeting - the third in barely seven days - is now planned for later this week. “We need a deal in the coming days, said the European commissioner responsible for the euro, Vladis Dombrovskis. The meeting will almost certainly take place ahead of a long-scheduled summit of all 28 European Union leaders.
EU leaders had been reluctant to discuss Greece at this Thursday’s summit, where the packed agenda includes the humanitarian migrant crisis on Europe’s borders, a controversial trade deal with the United States and the UK’s demands for treaty change.
The emergency meeting of EU leaders tonight is being seen as a victory for Tsipras, who has long argued that a breakthrough can only be made at the highest political levels.
Tsipras met his three main creditors – the European Commission, the IMF and the European Central Bank (ECB) – on Monday morning, after getting an initially positive reaction to his compromise plan.
Jean-Claude Juncker’s head of cabinet, Martin Selmayr, said the Athens proposal offered “a good basis for progress”, though he described the negotiations as a “forceps delivery”, underscoring the exertions to prevent Greece leaving the eurozone.
Related: Greek crisis: last-ditch bid to avert default - live updatesRelated: Greek crisis: last-ditch bid to avert default - live updates
It was not immediately clear how far the Greek plan met its creditors’ demands for spending cuts and welfare reforms. Hopes that agreement might be reached sent shares across Europe surging in early trading. The German DAX leapt by 2.5% and the French market was also up over 2%. In London, the FTSE 100 index jumped by 75 points, or 1.1%. Italian shares were up by 1.8%.
But hopes that agreement might be reached sent shares across Europe surging in early trading. The German DAX leapt by 2.5% and the French market was also up over 2%. In London, the FTSE 100 index jumped by 75 points, or 1.1%. Italian shares were up by 1.8%.
Negotiators are promising debt relief for Greece, which has seen its economy shrink by one quarter since the crisis began, but officials have stressed that a breakthrough will depend on a positive response from the Greek prime minister, Alexis Tsipras.Negotiators are promising debt relief for Greece, which has seen its economy shrink by one quarter since the crisis began, but officials have stressed that a breakthrough will depend on a positive response from the Greek prime minister, Alexis Tsipras.
Greece’s international creditors are looking at a deal that would extend the country’s bailout by six months and supply up to €18bn (£12.9bn) in rescue funds.Greece’s international creditors are looking at a deal that would extend the country’s bailout by six months and supply up to €18bn (£12.9bn) in rescue funds.
Eurozone leaders will discuss the plans at an emergency summit convened to resolve the debt crisis ahead of a €1.6bn payment to the International Monetary Fund that falls due on 30 June. Greece urgently needs funds ahead of a €1.6bn payment to the International Monetary Fund that falls due on 30 June.
Talks between Greece’s leftist government and its creditors have been deadlocked for five months and the country is fast running out of money.Talks between Greece’s leftist government and its creditors have been deadlocked for five months and the country is fast running out of money.
Related: Tsipras of Athens – a gripping drama entering its final act | Larry Elliott
Italy’s prime minister, Matteo Renzi, urged the two sides to seize a “window of opportunity”, saying all conditions were in place for them to reach a “win-win accord”.Italy’s prime minister, Matteo Renzi, urged the two sides to seize a “window of opportunity”, saying all conditions were in place for them to reach a “win-win accord”.
Tsipras meets his three main creditors – the European Commission, the IMF and the European Central Bank (ECB) – on Monday morning, ahead of a meeting with the other 18 eurozone leaders that gets underway at 7pm.
Eurozone finance ministers are also gathering in Brussels to hammer out technical details, just four days after an earlier meeting broke up in mutual recriminations without any progress.
The meeting of European leaders is a victory for Tsipras, who has long argued that the agreement can be reached only at the highest political levels.
The Greek financial system was given a boost ahead of the crunch talks, when the European Central Bank agreed to extend emergency funding to Greek banks.The Greek financial system was given a boost ahead of the crunch talks, when the European Central Bank agreed to extend emergency funding to Greek banks.
A banking source told Reuters that the ECB’s decision-making governing council had raised the amount of emergency funds available to Greece’s cash-starved banks and was ready to convene again any time it was needed.A banking source told Reuters that the ECB’s decision-making governing council had raised the amount of emergency funds available to Greece’s cash-starved banks and was ready to convene again any time it was needed.
The decision means Greek banks will not run out of cash in the near future, even as money continues to drain out of the Greek financial system.
Greek depositors lodged €1bn of withdrawal orders with Greek banks over the weekend, on top of the €4bn that had been taken out of cash points and counters last week.
With the clock ticking, some officials think the only way to avoid an IMF default is for the ECB to raise the ceiling on the short-term debt Athens is allowed to sell. This would need to happen by Monday next week.
The six-month rescue extension being considered would unlock the €7.2bn in Greece’s bailout fund that is yet to be disbursed as well, as €10.9bn already lent to the country but earmarked for recapitalisation of its weakened banks. The latter sum could be quickly transferred to the government to facilitate debt repayments.The six-month rescue extension being considered would unlock the €7.2bn in Greece’s bailout fund that is yet to be disbursed as well, as €10.9bn already lent to the country but earmarked for recapitalisation of its weakened banks. The latter sum could be quickly transferred to the government to facilitate debt repayments.
Underlining the growing concern beyond Greece, several thousand demonstrators gathered in Brussels on Sunday and several hundred in Amsterdam to plead for solidarity with the cash-strapped country.Underlining the growing concern beyond Greece, several thousand demonstrators gathered in Brussels on Sunday and several hundred in Amsterdam to plead for solidarity with the cash-strapped country.
In Athens itself, more than 7,000 people took to the streets for the second time this week to protest austerity with banners reading “A different Europe with Tsipras” and “You can’t blackmail the people, the country is not for sale”.In Athens itself, more than 7,000 people took to the streets for the second time this week to protest austerity with banners reading “A different Europe with Tsipras” and “You can’t blackmail the people, the country is not for sale”.
The head of Greece’s biggest bank said she thought “sanity will prevail” and lead both sides to a deal.The head of Greece’s biggest bank said she thought “sanity will prevail” and lead both sides to a deal.
Louka Katseli, the chief of the National Bank of Greece, told BBC radio: “To enter into such uncharted waters and take up all the risk both for the eurozone and for Greece for two or three billion [euros] difference, I think it’s insane.”Louka Katseli, the chief of the National Bank of Greece, told BBC radio: “To enter into such uncharted waters and take up all the risk both for the eurozone and for Greece for two or three billion [euros] difference, I think it’s insane.”
• The Guardian is holding a panel discussion on Greece, Grexit and the troika on Thursday. Come along to have your say. See below for more details.https://membership.theguardian.com/event/guardian-newsroom-should-greece-leave-the-euro-17456530954 • The Guardian is holding a panel discussion on Greece, Grexit and the troika on Thursday. Come along to have your say. Click here for more details.