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For Eurozone, a Day of Dueling Agendas on Greek Debt For Eurozone, a Day of Dueling Agendas on Greek Debt
(about 1 hour later)
BRUSSELS — Eurozone finance ministers gathered here Saturday trying either to salvage a debt deal with Greece, or gird for potential chaos in Greek banks, hours after Prime Minister Alexis Tsipras surprised Europe by calling for a national referendum on whether his country should accept bailout aid under terms he bitterly opposes. BRUSSELS — Eurozone finance ministers gathered here Saturday trying either to salvage a debt deal with Greece, or gird for potential chaos in Greek banks, hours after Prime Minister Alexis Tsipras surprised Europe by calling for a national referendum on whether his country should accept bailout aid under terms he bitterly opposes.
Mr. Tsipras’s announcement to resort to the ballot box could leave the eurozone ministers with few options but to concede defeat in their five-month effort to devise loan terms with Greece that all parties can accept. The ministers have been racing the clock — with five emergency meetings in the past 10 days — to reach a deal ahead of June 30, which is the date that the current bailout program for Greece expires.Mr. Tsipras’s announcement to resort to the ballot box could leave the eurozone ministers with few options but to concede defeat in their five-month effort to devise loan terms with Greece that all parties can accept. The ministers have been racing the clock — with five emergency meetings in the past 10 days — to reach a deal ahead of June 30, which is the date that the current bailout program for Greece expires.
The leader of the Eurogroup of eurozone finance ministers, Jeroen Dijsselbloem, on Saturday all but ruled out extending the bailout program to allow for a Greek referendum or to otherwise grant leniency to Athens.The leader of the Eurogroup of eurozone finance ministers, Jeroen Dijsselbloem, on Saturday all but ruled out extending the bailout program to allow for a Greek referendum or to otherwise grant leniency to Athens.
“Let me just say that I am very negatively surprised by today’s decisions by the Greek government,” Mr. Dijsselbloem said on his way into the finance ministers meeting.“Let me just say that I am very negatively surprised by today’s decisions by the Greek government,” Mr. Dijsselbloem said on his way into the finance ministers meeting.
“That is a sad decision for Greece because it has closed the door on further talks, where the door was still open in my mind,” he said. “We will hear from the Greek minister in our meeting today and then talk about future consequences.”“That is a sad decision for Greece because it has closed the door on further talks, where the door was still open in my mind,” he said. “We will hear from the Greek minister in our meeting today and then talk about future consequences.”
Hanging in the balance has been an installment of 7.2 billion euros, or about $8 billion, from that program that Athens desperately needs to avoid defaulting soon on its near-term debt obligations. Hanging in the balance has been an installment of 7.2 billion euros, or about $8 billion, from that bailout program that Athens desperately needs to avoid defaulting soon on its near-term debt obligations.
Talks seemed to collapse on Friday after Mr. Tsipras accused eurozone creditors like Germany, as well as the International Monetary Fund, of blackmailing his country. Chancellor Angela Merkel of Germany, though, insisted creditors had offered an “extremely generous” package to Greece.Talks seemed to collapse on Friday after Mr. Tsipras accused eurozone creditors like Germany, as well as the International Monetary Fund, of blackmailing his country. Chancellor Angela Merkel of Germany, though, insisted creditors had offered an “extremely generous” package to Greece.
Mr. Tsipras then threw the matter into further confusion by announcing shortly after midnight in Athens that he would ask Parliament to authorize a referendum late next week in which the Greek people could decide whether to accept the creditors’ latest offer. But he seemed to stack the deck, saying that the creditors were calling for “new, unbearable measures,” including tax increases and cuts to pensions and salaries that were a “humiliation’’ to Greece. Mr. Tsipras then threw the matter into further confusion by announcing shortly after midnight in Athens that he would ask Parliament to authorize a referendum late the next week in which the Greek people could decide whether to accept the creditors’ latest offer. But he seemed to stack the deck, saying that the creditors were calling for “new, unbearable measures,” including tax increases and cuts to pensions and salaries that were a “humiliation” to Greece.
The Greek Parliament is set to vote late Saturday on whether to hold that public vote. But the referendum would not occur before the current bailout program is set to expire on Tuesday. And Greece’s creditors may be unwilling to grant an extension for the public no vote that Mr. Tsipras appears to advocate. The Greek Parliament was set to vote late Saturday on whether to hold that public vote. But the referendum would not occur before the Tuesday expiration of the current bailout program. And Greece’s creditors may be unwilling to grant an extension for the public no vote that Mr. Tsipras appears to advocate.
Since the Greek economy imploded five years ago, the creditors — the I.M.F., the European Central Bank and the other eurozone nations — have committed loans to Greece worth more than €240 billion, or about $264 billion at today’s exchange rates.Since the Greek economy imploded five years ago, the creditors — the I.M.F., the European Central Bank and the other eurozone nations — have committed loans to Greece worth more than €240 billion, or about $264 billion at today’s exchange rates.
An expiration of the current bailout program would leave Greece unable to tap the remaining €7.2 billion euros left in the rescue package. And it would almost certainly guarantee that Greece will default on a payment of about 1.6 billion euros, or $1.8 billion, that is due to the I.M.F. on Tuesday. An expiration of the current bailout program would leave Greece unable to tap the €7.2 billion remaining in the rescue package. And it would almost certainly guarantee that Greece would default on a payment of about 1.6 billion euros, or $1.8 billion, that is due to the I.M.F. on Tuesday.
A refusal by the Eurogroup to grant Mr. Tsipras the extension he is seeking would be the first clear sign that Mr. Tsipras and his leftist government have overplayed their hand by failing to scare the country’s creditors — wearied by months of continuous wrangling and emergency meetings — into making last-minute concessions.A refusal by the Eurogroup to grant Mr. Tsipras the extension he is seeking would be the first clear sign that Mr. Tsipras and his leftist government have overplayed their hand by failing to scare the country’s creditors — wearied by months of continuous wrangling and emergency meetings — into making last-minute concessions.
Arriving at the meeting on Saturday, the Dutch state secretary for finance, Eric Wiebes, also appeared to reject Mr. Tsipras’s suggestion for more time. “I see no reason for an extension,” Mr. Wiebes told reporters. “The position is very clear. The deadline has been known for four months.”Arriving at the meeting on Saturday, the Dutch state secretary for finance, Eric Wiebes, also appeared to reject Mr. Tsipras’s suggestion for more time. “I see no reason for an extension,” Mr. Wiebes told reporters. “The position is very clear. The deadline has been known for four months.”
Eurozone ministers might instead discuss a so-called Plan B, which officials say is aimed at coordinating decisions by central banks in eurozone countries to limit any potential regional damage from a Greek default.Eurozone ministers might instead discuss a so-called Plan B, which officials say is aimed at coordinating decisions by central banks in eurozone countries to limit any potential regional damage from a Greek default.
Much of what happens next in rapidly unfolding Greek crisis rests with the European Central Bank. The central bank’s president, Mario Draghi, was to meet in Brussels on Saturday with the Greek deputy prime minister, Yannis Dragasakis, and with Euclid Tsakalotos, the Greek official who has been coordinating negotiations with creditors. Much of what happens next in the rapidly unfolding Greek crisis rests with the European Central Bank. The central bank’s president, Mario Draghi, was to meet in Brussels on Saturday with the Greek deputy prime minister, Yannis Dragasakis, and with Euclid Tsakalotos, the Greek official who has been coordinating negotiations with creditors.
The European Central Bank has kept Greek banks afloat lately with daily doses of emergency liquidity, to counter the outflow of money as anxious Greeks withdraw their savings. While there has been no sign of a full-scale bank run in Greece since Mr. Tsipras’s announcement, the lines at cash machines on Saturday in Athens were much longer than in recent days. The European Central Bank has kept Greek banks afloat lately with daily doses of emergency liquidity, to counter the outflow of money as anxious Greeks have withdrawn their savings. While there has been no sign of a full-scale bank run in Greece since Mr. Tsipras’s announcement, the lines at cash machines on Saturday in Athens were much longer than they had been in recent days.
In an early morning television address, Mr. Tsipras appealed to the Eurogroup of finance ministers to extend the bailout by “a few days” — presumably to allow the referendum to take place first.In an early morning television address, Mr. Tsipras appealed to the Eurogroup of finance ministers to extend the bailout by “a few days” — presumably to allow the referendum to take place first.
But frustrations with the leftist government in Athens have reached new highs. Giving Greece more time is likely to meet stiff opposition from finance ministers, including Wolfgang Schäuble of Germany — although some other voices in Germany appeared to call for a more supple approach.But frustrations with the leftist government in Athens have reached new highs. Giving Greece more time is likely to meet stiff opposition from finance ministers, including Wolfgang Schäuble of Germany — although some other voices in Germany appeared to call for a more supple approach.
Speaking on Saturday morning, Sigmar Gabriel, Germany’s vice chancellor, urged his colleagues to consider the proposal by Mr. Tsipras.Speaking on Saturday morning, Sigmar Gabriel, Germany’s vice chancellor, urged his colleagues to consider the proposal by Mr. Tsipras.
“We would be well advised not simply to push this proposal from Mr. Tsipras aside and say that it’s a trick. If the questions are clear — if it’s really clear that they are voting on a program that has been negotiated, it could make sense,” Mr. Gabriel, who is the leader of Germany’s center-left Social Democrats, told Deutschlandfunk radio. Mr. Gabriel, who is the leader of Germany’s center-left Social Democrats, told Deutschlandfunk radio:
But, Mr. Gabriel warned, a referendum makes sense only if the vote is based on “what Europe is offering.” “We would be well advised not simply to push this proposal from Mr. Tsipras aside and say that it’s a trick. If the questions are clear — if it’s really clear that they are voting on a program that has been negotiated, it could make sense.”
But, Mr. Gabriel warned, a referendum made sense only if the vote was based on “what Europe is offering.”
A Greek government spokesman, Gavriil Sakellaridis, said Mr. Tsipras on Friday night had spoken by phone with Mr. Draghi, the central bank president, who “showed absolute understanding and sensitivity to the democratic decision of the Greek government.”A Greek government spokesman, Gavriil Sakellaridis, said Mr. Tsipras on Friday night had spoken by phone with Mr. Draghi, the central bank president, who “showed absolute understanding and sensitivity to the democratic decision of the Greek government.”
But if the European Central Bank ends its emergency funding to Greece’s banks, the Greek government might need to impose capital controls, limiting how much money people and companies can withdraw from banks. That would further weaken an already ailing economy and could stir popular anger.But if the European Central Bank ends its emergency funding to Greece’s banks, the Greek government might need to impose capital controls, limiting how much money people and companies can withdraw from banks. That would further weaken an already ailing economy and could stir popular anger.
The bigger fear is that a Greek default could force the country eventually to be the first to leave the 19-nation euro currency union and threaten the regional integrity of the broader European Union.The bigger fear is that a Greek default could force the country eventually to be the first to leave the 19-nation euro currency union and threaten the regional integrity of the broader European Union.