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The Debt Crisis: What Greece Wants and What It’s Offering | The Debt Crisis: What Greece Wants and What It’s Offering |
(33 minutes 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 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. | 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 cannot 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 is the moment Greece might be expelled from 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 included: | 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 a 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. | |
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. |
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 will not say how, exactly, it will do any of this until Thursday, and specifics may never be made public. | 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. | 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. |
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. |