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Tsipras Signals Greece May Accept Bailout Terms Tsipras Signals Greece May Accept Bailout Terms
(35 minutes later)
ATHENS — The Greek government has indicated to its creditors that it is willing to accept many of the terms of a bailout package that it had earlier rejected, if they are part of a broader deal to address the country’s funding needs for the next two years, officials said on Wednesday.ATHENS — The Greek government has indicated to its creditors that it is willing to accept many of the terms of a bailout package that it had earlier rejected, if they are part of a broader deal to address the country’s funding needs for the next two years, officials said on Wednesday.
The development raised the prospect of progress in resolving a financial crisis that has sent shudders through global markets and deeply strained European unity.The development raised the prospect of progress in resolving a financial crisis that has sent shudders through global markets and deeply strained European unity.
In a letter sent on Tuesday to the creditors — the European Central Bank, the International Monetary Fund and other eurozone countries — Prime Minister Alexis Tsipras said Greece was “prepared to accept” a deal set out publicly over the weekend by the creditors, with small modifications to some of the key points of contention on issues like pension cuts and tax increases. Mr. Tsipras linked Greece’s acceptance of the terms to a new package of bailout aid that would need to be negotiated. In a letter sent on Tuesday to the creditors — the European Central Bank, the International Monetary Fund and other eurozone countries — Prime Minister Alexis Tsipras said Greece was “prepared to accept” a deal set out publicly over the weekend by the creditors, with small modifications to some of the central points of contention on issues like pension cuts and tax increases. Mr. Tsipras linked Greece’s acceptance of the terms to a new package of bailout aid that would need to be negotiated.
Jean-Claude Juncker, the president of the European Commission, declined to answer questions about Greece at a news briefing on Wednesday.Jean-Claude Juncker, the president of the European Commission, declined to answer questions about Greece at a news briefing on Wednesday.
But finance ministers from the countries using the euro were scheduled to confer later on Wednesday to continue discussions on Greece. They had turned aside a last-minute plea for help Tuesday night from Greece but had suggested that there were grounds for optimism about progress in getting negotiations back on track before a referendum scheduled for Sunday in Greece on whether to accept the terms being sought by the creditors. But finance ministers from the countries using the euro were scheduled to confer later on Wednesday to continue discussions on Greece. They had turned aside a last-minute plea for help Tuesday night from Greece. However, they had suggested that there were grounds for optimism about progress in getting negotiations back on track before a referendum scheduled for Sunday in Greece on whether to accept the terms being sought by the creditors.
The dramatic turn came hours after Greece missed a debt payment to the I.M.F., leaving Greece effectively in default and raising the pressure on the country to find a solution to its rapidly escalating financial squeeze. With its banking system shut down and access to further aid cut off, Greece faced the prospect of further debt defaults and the possibility of being forced to abandon the euro as its currency. The turn came hours after Greece missed a debt payment to the I.M.F., leaving Greece effectively in default and raising the pressure on the country to find a solution to its rapidly escalating financial squeeze. With its banking system shut down and access to more aid cut off, Greece faced the prospect of further debt defaults and the possibility of being forced to abandon the euro as its currency.
The letter from Mr. Tsipras was first reported by The Financial Times. The report sent stock prices in Europe higher. Mr. Tsipras was expected to speak publicly later on Wednesday.The letter from Mr. Tsipras was first reported by The Financial Times. The report sent stock prices in Europe higher. Mr. Tsipras was expected to speak publicly later on Wednesday.
News of the letter emerged ahead of a meeting of the European Central Bank’s Governing Council to consider whether to cut off entirely the line of credit that has kept the Greek banking system from collapsing.News of the letter emerged ahead of a meeting of the European Central Bank’s Governing Council to consider whether to cut off entirely the line of credit that has kept the Greek banking system from collapsing.
In the letter, Mr. Tsipras said he was prepared to accept the European Commission’s proposal of June 28, with five amendments on issues that had been particular sticking points.In the letter, Mr. Tsipras said he was prepared to accept the European Commission’s proposal of June 28, with five amendments on issues that had been particular sticking points.
He continued to ask for a lower value-added tax on Greek islands, for instance, to help bolster tourism and compensate for the high price of delivering goods to such areas. And he still objected to a system of automatically adjusting pension payments according to the financial strength of the underlying pension funds rather than relying on government assistance to maintain the payments.He continued to ask for a lower value-added tax on Greek islands, for instance, to help bolster tourism and compensate for the high price of delivering goods to such areas. And he still objected to a system of automatically adjusting pension payments according to the financial strength of the underlying pension funds rather than relying on government assistance to maintain the payments.
But he accepted the bulk of what the Europeans had asked for in their last proposal, including creating strong disincentives to early retirement.But he accepted the bulk of what the Europeans had asked for in their last proposal, including creating strong disincentives to early retirement.
Nonetheless, there remain considerable hurdles to any comprehensive new deal. Greece’s existing bailout package expired at midnight on Tuesday, meaning that an entirely new arrangement would have to be negotiated. Officials from the European Union, Germany and the I.M.F., among others, remain deeply skeptical about whether Mr. Tsipras’s government would follow through on commitments to the kinds of changes the creditors are seeking. And there has been little progress in addressing the issue underlying Greece’s troubles: whether and how the country should be granted any reduction in its debt payments. Nonetheless, there remain considerable hurdles to any comprehensive new deal. Greece’s existing bailout package expired at midnight on Tuesday, meaning that an entirely new arrangement would have to be negotiated.
Officials from the European Union, Germany and the I.M.F., among others, remain deeply skeptical about whether Mr. Tsipras’s government would follow through on commitments to the kinds of changes the creditors are seeking. And there has been little progress in addressing the issue underlying Greece’s troubles: whether and how the country should be granted any reduction in its debt payments.
While finance ministers from the eurozone countries had been careful on Tuesday night to suggest there might be a path to progress, they also showed no inclination to rush into a deal. Chancellor Angela Merkel of Germany made clear on Tuesday that she favored waiting until after the Greek referendum on Sunday to reopen talks, and her finance minister, Wolfgang Schäuble, repeated that message on Wednesday after news of Mr. Tsipras’s letter became public.While finance ministers from the eurozone countries had been careful on Tuesday night to suggest there might be a path to progress, they also showed no inclination to rush into a deal. Chancellor Angela Merkel of Germany made clear on Tuesday that she favored waiting until after the Greek referendum on Sunday to reopen talks, and her finance minister, Wolfgang Schäuble, repeated that message on Wednesday after news of Mr. Tsipras’s letter became public.