This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.nytimes.com/2015/07/08/business/international/greece-debt-eurozone-meeting.html

The article has changed 18 times. There is an RSS feed of changes available.

Version 0 Version 1
Greece Expected to Offer Proposals as Eurozone Leaders Prepare to Meet Eurozone Officials Gather to Hear Greek Debt Plan
(35 minutes later)
BRUSSELS — The Greek government was expected to make proposals to eurozone leaders on Tuesday to support its battered economy and keep the country in the single currency area, as Athens and its creditors resume their struggle over an elusive solution to Greece’s long-running economic crisis. BRUSSELS — The head of the group of eurozone finance ministers was upbeat heading into a crucial meeting for Greece on Tuesday. But like other European officials who said they were willing to listen to the latest Greek bailout proposal, he indicated that the onus was on Athens to offer something new and specific.
But a quick fix for Athens looked extremely difficult to achieve. The stakes were rising on Tuesday ahead of the latest emergency summit meeting of European leaders. None of them wants to take the blame for a possible sudden, chaotic departure from the eurozone by Greece. That means that all sides could agree to keep talking even as the crisis reaches new levels of intensity, and even as Greece hurtles toward a deadline — a payment of 3.5 billion euros, or about $3.9 billion, to the European Central Bank on July 20 — that most observers think it cannot miss without leaving the eurozone. “It’s going to be very difficult, but we will await new proposals from the Greek government,” said the official, Jeroen Dijsselbloem, before the meeting of the eurozone’s 19 finance ministers, known as the Eurogroup. The meeting included Greece’s newly installed finance chief, Euclid Tsakalotos, who conferred with Mr. Dijsselbloem beforehand.
The Eurogroup of finance ministers is scheduled to convene at 1 p.m. in Brussels, followed by an emergency summit meeting of the 19 leaders of eurozone countries at 7 p.m. that is expected to include Mario Draghi, the president of the European Central Bank, and Jeroen Dijsselbloem, the president of the Eurogroup. After the Sunday referendum in which a previous eurozone bailout offer was rejected over its austerity demands, Greece is trying reach a new bailout agreement as the government and banks are quickly running out of money. Because its previous international bailout program expired before Athens could receive a loan payout of 7.2 billion euros, or about $7.9 billion, the negotiations for any new aid program are essentially starting from scratch.
Financial markets appeared to be in a wait-and-see mode, with European stocks essentially flat in early trading on Tuesday. That is why even as Mr. Dijsselbloem and other European officials — including Prime Minister Manuel Valls of France and the European Commission president, Jean-Claude Juncker — on Tuesday said they were willing to listen to what the Greek government had to say, they tended to express friendly skepticism.
“Now is the time to get round the table again,” Mr. Juncker said in a statement to the European Parliament in Strasbourg, France, alluding to Greece.
“In Europe, there are no simple answers,” he said. “Europe is all about compromise, and this takes time.”
But time is what Greece does not have. And some of the eurozone finance ministers were openly hostile to the idea of reopening negotiations that the Greek prime minister, Alexis Tsipras, broke off nearly two weeks ago.
Peter Kazimir, the Slovak finance minister, told reporters before the meeting that “prolonging these debates and discussions would be detrimental to Greece and to the eurozone as a whole.” He said a near-term promise of debt relief, a central demand by Athens, was a “red line” and “absolutely impossible.”
The German finance minister, Wolfgang Schäuble, long the most outspoken skeptic of Greece’s ability to come up with a workable plan, also rejected the suggestion of debt reduction for Greece, saying it was not allowed under European regulations. As he headed into the meeting, Mr. Schäuble insisted that without a new agreement, there would be no financial assistance for Greece, which “fought successfully to reject” such a deal.
“We respect that, but without a program, there is no way to help Greece within the eurozone,” Mr. Schäuble said.
Asked whether the Greeks could retain the euro currency, Mr. Schäuble threw the question back, saying, “You have to ask the Greek government.”
The finance ministers were meeting ahead of an emergency summit meeting of the 19 leaders of eurozone countries at 7 p.m. in Brussels, including Mr. Tsipras. Also expected to attend was Mario Draghi, the president of the European Central Bank, another of Greece’s big creditors. Mr. Dijsselbloem was also expected to be at the evening meeting, presumably to report on any progress from the afternoon gathering.
Without a positive progress report from the afternoon session, there might be few prospects for the leaders to reach any sort of agreement with Mr. Tsipras.
The Irish finance minister, Michael Noonan, was more positive than some of his peers on the possibility that Greece’s debts could be restructured, and he also appeared to encourage Greece to push that request. But he, too, said that Tuesday’s meeting would not yield a breakthrough.
“It is a lot to do in a very short period of time, so I don’t think we are looking at a conclusion today,” Mr. Noonan said before the meeting, referring to a Greek request for a new aid program. But he warned that seemingly endless negotiations between Athens and its creditors since the election of the Tsipras government in January could not drag on for weeks. “I don’t think any of us want to kick the can down the road for another month,” he said. He added that any workable proposal should “carry for several years.”
Still, no one presumably wants to take the blame for a possible sudden, chaotic Greek departure from the eurozone. That means that all sides could agree to keep talking even as the crisis reaches new levels of intensity, and even as Greece hurtles toward a deadline — a payment of €3.5 billion to the European Central Bank on July 20 — that most analysts think it cannot miss without leaving the eurozone.
Financial markets were not sanguine, the Eurostoxx 50 index of eurozone blue chip stocks was down nearly 1 percent in early afternoon trading.
“Today’s eurozone summit should be another crossroads for either a last-minute compromise or some kind of Grexit,” Carsten Brzeski, the chief economist at the bank ING-DiBa in Frankfurt, wrote on Tuesday in a briefing note, using the term for Greece’s exiting the euro currency bloc. “However, the biggest hurdle to such a compromise is the bad blood spilled on Brussels’s carpets over the last five months.”“Today’s eurozone summit should be another crossroads for either a last-minute compromise or some kind of Grexit,” Carsten Brzeski, the chief economist at the bank ING-DiBa in Frankfurt, wrote on Tuesday in a briefing note, using the term for Greece’s exiting the euro currency bloc. “However, the biggest hurdle to such a compromise is the bad blood spilled on Brussels’s carpets over the last five months.”
The finance ministers, who must approve any new arrangement with Athens, have said they are waiting to see whether Greece will make a substantially new offer on Tuesday after months of fruitless wrangling with the leftist leadership in Athens and several emergency meetings.
Senior German officials dug in their heels on Monday, saying a vote by Greeks to reject further austerity in a referendum last weekend did not oblige other countries in the eurozone to change their positions.Senior German officials dug in their heels on Monday, saying a vote by Greeks to reject further austerity in a referendum last weekend did not oblige other countries in the eurozone to change their positions.
During their early afternoon meeting, the finance ministers will have their first chance to hear directly from Greece’s new finance minister, Euclid Tsakalotos, who took over from his combative predecessor, Yanis Varoufakis, on Monday. But the finance ministers on Tuesday were having their first chance to hear from Mr. Tsakalotos, who took over from his combative predecessor, Yanis Varoufakis, on Monday.
Mr. Tsakalotos has been coordinating negotiations between Greece and its creditors since April, and his presence at the Eurogroup could provide a welcome change of tone after ministers grew weary of Mr. Varoufakis’s hectoring style and long lectures.Mr. Tsakalotos has been coordinating negotiations between Greece and its creditors since April, and his presence at the Eurogroup could provide a welcome change of tone after ministers grew weary of Mr. Varoufakis’s hectoring style and long lectures.
The Eurogroup will also be meeting just days after the International Monetary Fund concluded that Greece must have some form of debt relief — a central demand by Athens. The Eurogroup was also meeting just days after the International Monetary Fund concluded that Greece must have some form of debt relief — a central demand by Athens.
But eurozone ministers have shown little sign of willingness to concede debt relief before Greece carries out promised overhauls in areas like taxation and pension spending. The Eurogroup has also flatly refused to open any formal negotiations with Greece on its application for a third bailout package from a eurozone bailout fund, the European Stability Mechanism.But eurozone ministers have shown little sign of willingness to concede debt relief before Greece carries out promised overhauls in areas like taxation and pension spending. The Eurogroup has also flatly refused to open any formal negotiations with Greece on its application for a third bailout package from a eurozone bailout fund, the European Stability Mechanism.
Eurozone member states have already lent €184 billion to Greece as part of two international bailouts since 2010. The rescues have totaled €240 billion, including contributions from the International Monetary Fund and the European Central Bank.Eurozone member states have already lent €184 billion to Greece as part of two international bailouts since 2010. The rescues have totaled €240 billion, including contributions from the International Monetary Fund and the European Central Bank.
The position of Alexis Tsipras, the Greek prime minister, was solidified by his overwhelming victory in the referendum campaign during the weekend. Since then, he has sounded more conciliatory. He is expected to address the summit meeting of eurozone leaders Tuesday evening. Mr. Tsipras’s position was solidified by his overwhelming victory in the referendum campaign during the weekend. Since then, he has sounded more conciliatory. He is expected to address the summit meeting of eurozone leaders Tuesday evening.
In the rest of Europe, trust in Mr. Tsipras is low.In the rest of Europe, trust in Mr. Tsipras is low.
Mr. Tsipras let the country’s second bailout package lapse last month when creditors thought a deal was close at hand. Instead, he chose to call Sunday’s surprise referendum, which was seen as a betrayal by some senior European Union officials.Mr. Tsipras let the country’s second bailout package lapse last month when creditors thought a deal was close at hand. Instead, he chose to call Sunday’s surprise referendum, which was seen as a betrayal by some senior European Union officials.
There are also concerns over whether Mr. Tsipras would ever put in place the conditions that creditors have demanded as the basis for any deal.There are also concerns over whether Mr. Tsipras would ever put in place the conditions that creditors have demanded as the basis for any deal.
Eurozone leaders should “not agree to some experiments by the Greek government” in exchange for further aid, the Slovenian government said on Monday on its website.Eurozone leaders should “not agree to some experiments by the Greek government” in exchange for further aid, the Slovenian government said on Monday on its website.
German officials have emphasized that Greece should not be given more leniency than other formerly beleaguered countries in the eurozone like Ireland and Portugal, which had experienced major progress as a result of the disciplinary budgetary discipline and structural changes prescribed by the creditors. Chancellor Angela Merkel of Germany emphasized on Monday that just as Greek voters had a right to make their voices heard, the views of other democracies in the European Union also had to be respected. Some senior European Union officials have made it clear that offering Greece leniency could be the wrong approach, since formerly beleaguered countries in the eurozone like Ireland and Portugal had experienced major progress as a result of the disciplinary budgetary discipline and structural changes prescribed by the creditors.
On Tuesday, Jean-Claude Juncker, the president of the European Commission, which helps oversee Greece’s adherence to the terms of its bailouts, said “now is the time to get round the table again” in a statement to the European Parliament in Strasbourg, France.
“There are those in the European Union who openly campaign for the exit of Greece from the eurozone,” he said. But this, he said, was foolish because “simplistic answers are the wrong ones.”
“In Europe, there are no simple answers,” he said. “Europe is all about compromise, and this takes time.”
A failure to make good on the July 20 bailout payment to the European Central Bank would make it almost inevitable that Greece would have to cut a lifeline for the country’s cash-drained banks. And that could force the country to print a parallel currency that would hasten its departure from the currency bloc.A failure to make good on the July 20 bailout payment to the European Central Bank would make it almost inevitable that Greece would have to cut a lifeline for the country’s cash-drained banks. And that could force the country to print a parallel currency that would hasten its departure from the currency bloc.
That prospect could add pressure on the Greeks this week to commit to a number of short-term changes for bridge financing to avoid defaulting on the European Central Bank, and then conclude a wider program, with debt relief, later in the year.That prospect could add pressure on the Greeks this week to commit to a number of short-term changes for bridge financing to avoid defaulting on the European Central Bank, and then conclude a wider program, with debt relief, later in the year.
But one analyst emphasized on Tuesday that the track record of the government in Athens would make it extremely difficult to take any of its commitments at face value.But one analyst emphasized on Tuesday that the track record of the government in Athens would make it extremely difficult to take any of its commitments at face value.
“It remains very unclear whether the Greek government is really trying to avoid an exit from the euro area, or whether it only wants to avoid being held responsible for it by its domestic public opinion,” said Nicolas Véron, a senior fellow at Bruegel, a research organization in Brussels.“It remains very unclear whether the Greek government is really trying to avoid an exit from the euro area, or whether it only wants to avoid being held responsible for it by its domestic public opinion,” said Nicolas Véron, a senior fellow at Bruegel, a research organization in Brussels.