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.
The Debt Crisis: What Greece Wants and What It’s Offering
The Debt Crisis: What Greece Wants and What It’s Offering
(about 4 hours later)
What does Greece want?
What does Greece want?
Greece wants debt relief from its European creditors, including Germany and France, the European Central Bank, and the International Monetary Fund.
Greece wants debt relief from its European creditors, including Germany and France, the European Central Bank and the International Monetary Fund.
Athens owes about 320 billion euros, and has already missed a repayment last week of about €1.5 billion, or $1.7 billion, to the International Monetary Fund. Greece must pay back €3.5 billion to the European Central Bank by July 20. That is highly unlikely.
Athens owes about 320 billion euros, and already missed a payment last week of about €1.5 billion, or $1.7 billion, to the I.M.F. Greece must pay back €3.5 billion to the European Central Bank by July 20. That seems highly unlikely.
Why can’t Greece make these debt payments?
Why can’t Greece make these debt payments?
Greece is about to run out of money, and Europe has said it will not lend money to the Greek government, or the country’s banks, until it changes its ways. When Greece runs out of money, and can’t borrow any more, it will not be able to honor its debts, pay pensions or finance services.
Greece is about to run out of money, and Europe has said it will not lend money to the Greek government, or the country’s banks, until it changes its ways. When Greece runs out of money, and cannot borrow any more, it will not be able to honor its debts, pay pensions or finance services.
That’s the moment Greece may be expelled or could quit from the group of countries that uses the euro. Its government would have to start printing paper money, possibly denominated in drachmas, Greece’s former currency, to keep some semblance of its economy going. There is no real precedent for this in Europe.
That is the moment Greece might be expelled or pull out of the group of countries that uses the euro. Its government would have to start printing money, possibly denominated in drachmas, the former currency, to keep some semblance of its economy going. There is no real precedent for this in Europe.
What is Greece willing to do?
What is Greece willing to do?
On Wednesday, the new Greek finance minister, Euclid Tsakalotos, sent a letter to the European Stability Mechanism, the Continent’s bailout fund. The central points:
On Wednesday, the new Greek finance minister, Euclid Tsakalotos, sent a letter to the European Stability Mechanism, the Continent’s bailout fund. The central points included:
• A request for a three-year loan program to meet debt obligations and ensure the stability of Greece’s financial system. Previously, Greece wanted two years and immediate debt relief.
A request for a three-year loan program to meet debt obligations and ensure the stability of Greece’s financial system. Previously, Greece wanted two years and immediate debt relief.
• Athens is willing to postpone talk of debt relief until after a loan package is agreed to, a new concession.
Athens is willing to postpone talk of debt relief until after a loan package is agreed to, a new concession.
• After three years, Athens wants “full and affordable market financing to meet its future funding requirements as well as sustainable economic and financial situation.”
After three years, Athens wants “full and affordable market financing to meet its future funding requirements as well as a sustainable economic and financial situation.”
• Greece will commit to “a comprehensive set of reforms and measures to be implemented in the areas of fiscal sustainability, financial stability, and long-term economic growth,” as early as next week.
Greece will commit to “a comprehensive set of reforms and measures to be implemented in the areas of fiscal sustainability, financial stability, and long-term economic growth,” as early as next week.
• Mr. Tsakalotos’s letter said that measures would include changes to the tax code and pension payments, as well as modernization of the Greek economy.
Mr. Tsakalotos’s letter said that measures would include changes to the tax code and pension payments, as well as modernization of the Greek economy.
The letter also reiterated pledges by Greek officials, including Prime Minister Alexis Tsipras, to remain part of Europe’s common currency. But that might not be up to Greece.
Any loan package for Greece must be approved by the European Commission, the I.M.F. and the European Central Bank.
Any loan package for Greece must be approved by the European Commission, the I.M.F. and the European Central Bank.
What are the prospects that this offer will help?
What are the prospects that this offer will help?
The prospects are unclear. Athens won’t say how, exactly, it will do any of this until Thursday, and specifics may never be made public. But Greece’s new willingness to postpone talk of debt relief until after a bailout deal is agreed might make a difference: France might be willing to consider this, but Chancellor Angela Merkel of Germany said Wednesday she was still not convinced.
The prospects are unclear. Athens will not say how, exactly, it will do any of this until Thursday, and specifics may never be made public.
Greece’s new willingness to postpone talk of debt relief until after a bailout deal is reached might make a difference. France might be willing to consider this, but Chancellor Angela Merkel of Germany said Wednesday she was not convinced.
What is Europe offering?
What is Europe offering?
Nothing. Or nothing new.
Nothing. Or nothing new.
Before Greece missed its I.M.F. payment and after Prime Minister Tsipras unexpectedly announced a national referendum on the deal proposed by creditors, the European Central Bank cut Greece off. It said it would not increase emergency funding for Greek banks and would not release a €7.2 billion bailout payment.
Europe wants Greece to reduce its spending before it will be willing to renegotiate any debt or lend Greece any more euros.
Europe wants Greece to reduce its spending before it will be willing to renegotiate any debt or lend Greece any more euros.
European officials, who all along have insisted on deep budget cuts and steep tax increases, had indicated the possibility of a last-minute concession on demands for Greece to cut bonus payments for the poorest pensioners. Other specifics of the deal offered, and since rescinded, by Europe were never made public.
Greek officials characterized that offer as unpalatable ahead of Sunday’s referendum. Voters seemed to overwhelmingly agree, even though they might not have known what, exactly, they were voting on when they rejected the offer.
Greece wants debt relief sooner rather than later, and enough money to keep operating for three years without cutting spending as much as Europe wants it to.
Europe, led by the austerity-minded Ms. Merkel, wants Greece to make deeper cuts than it is willing to make. Ms. Merkel has the support of a number of leaders of eurozone countries who have had to take similarly difficult belt-tightening measures in recent years, including Italy, Spain and East European members of the eurozone.
