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| Tusk rejects Tsipras request for EU summit on Greece bailout | Tusk rejects Tsipras request for EU summit on Greece bailout |
| (about 1 hour later) | |
| Mounting urgency has returned to Greece with the country’s financial predicament igniting fears of a re-run of last summer’s nail-biting drama. | |
| Rejecting a Greek request for an extraordinary EU summit to discuss its troubled bailout programme, European council president Donald Tusk instead urged eurozone finance ministers to resume talks that would avert further turmoil. The nation faces default if it fails to receive the necessary loans to cover €3.5 bn in maturing debt in July. | Rejecting a Greek request for an extraordinary EU summit to discuss its troubled bailout programme, European council president Donald Tusk instead urged eurozone finance ministers to resume talks that would avert further turmoil. The nation faces default if it fails to receive the necessary loans to cover €3.5 bn in maturing debt in July. |
| “We have to avoid a situation of renewed uncertainty for Greece,” he told reporters after speaking with prime minister Alexis Tsipras on Wednesday. “We need a specific date for a new Eurogroup meeting in the not-so-distant future and I am talking not about weeks but about days.” | “We have to avoid a situation of renewed uncertainty for Greece,” he told reporters after speaking with prime minister Alexis Tsipras on Wednesday. “We need a specific date for a new Eurogroup meeting in the not-so-distant future and I am talking not about weeks but about days.” |
| In a repeat of last year’s heady days, Athens’ leftist-led government is scrambling to raise funds to ensure payment of salaries and pensions in May. | In a repeat of last year’s heady days, Athens’ leftist-led government is scrambling to raise funds to ensure payment of salaries and pensions in May. |
| The reserves of state entities and pension funds have effectively been sequestered with officials demanding deposits be placed in the central bank on short-term loan to cover looming shortfalls. | The reserves of state entities and pension funds have effectively been sequestered with officials demanding deposits be placed in the central bank on short-term loan to cover looming shortfalls. |
| “The government is behaving as if it has already run out of money,” said prominent political commentator Pantelis Kapsis. “That in itself signifies there will be no agreement soon. There is great uncertainty. All scenarios are on the table including early elections.” | “The government is behaving as if it has already run out of money,” said prominent political commentator Pantelis Kapsis. “That in itself signifies there will be no agreement soon. There is great uncertainty. All scenarios are on the table including early elections.” |
| Greece’s embattled prime minister appealed for the emergency EU summit after Athens and its creditors failed late Tuesday to resolve differences over the extent of budget cuts and reforms the debt-stricken state must make in return for rescue loans. | Greece’s embattled prime minister appealed for the emergency EU summit after Athens and its creditors failed late Tuesday to resolve differences over the extent of budget cuts and reforms the debt-stricken state must make in return for rescue loans. |
| The lack of headway prompted Dutch finance minister and Eurogroup chairman, Jeroen Dijsselbloem, who oversees negotiations, to cancel a scheduled meeting at which it was hoped the talks would finally be concluded on Thursday. Well-briefed Dutch sources told the Guardian it was unlikely a new meeting would be held imminently. | The lack of headway prompted Dutch finance minister and Eurogroup chairman, Jeroen Dijsselbloem, who oversees negotiations, to cancel a scheduled meeting at which it was hoped the talks would finally be concluded on Thursday. Well-briefed Dutch sources told the Guardian it was unlikely a new meeting would be held imminently. |
| Negotiations have been deadlocked for months. Initially it was hoped the review – the first since Greece signed up to a third, €86bn bailout – would be completed in October, allowing badly needed loan instalments to be disbursed. | |
| Tusk’s intervention highlights the fears that the drawn out process has now unleashed. “We are undoubtedly heading for another very hot summer,” said one EU diplomat. “And are back again seeing another round of brinkmanship.” | Tusk’s intervention highlights the fears that the drawn out process has now unleashed. “We are undoubtedly heading for another very hot summer,” said one EU diplomat. “And are back again seeing another round of brinkmanship.” |
| Greek officials insist that a package of austerity measures worth €5.4bn – or 3% of GDP – that the government accepted to enact when it signed up in August to the bailout has been agreed. The measures, which include tax increases and the overhaul of the pension system, have formed the bulk of negotiations. | Greek officials insist that a package of austerity measures worth €5.4bn – or 3% of GDP – that the government accepted to enact when it signed up in August to the bailout has been agreed. The measures, which include tax increases and the overhaul of the pension system, have formed the bulk of negotiations. |
| But this month the IMF made the dramatic move of demanding that Greece would also have to legislate additional “contingency measures” worth €3.6bn, or 2% of GDP, to be enforced in the event that it failed to meet fiscal targets. IMF officials said the need for extra assurances emanated from differences in view between the Washington-based fund and EU officials over Athens’ ability to achieve a 3.5% primary surplus in 2018. | But this month the IMF made the dramatic move of demanding that Greece would also have to legislate additional “contingency measures” worth €3.6bn, or 2% of GDP, to be enforced in the event that it failed to meet fiscal targets. IMF officials said the need for extra assurances emanated from differences in view between the Washington-based fund and EU officials over Athens’ ability to achieve a 3.5% primary surplus in 2018. |
| Tsipras’s embattled government has rejected the demand out of hand describing it as both outlandish – the Greek economy has contracted by more than 25% since the debt crisis erupted in late 2010 – and unconstitutional. | |
| With the ruling Syriza party deeply divided – and MPs facing angry constituents – there are grave concerns over whether the government, clinging to power with a majority of just three, would even be able to pass such measures. | With the ruling Syriza party deeply divided – and MPs facing angry constituents – there are grave concerns over whether the government, clinging to power with a majority of just three, would even be able to pass such measures. |
| On Wednesday it appeared to win support from the president of the EU commission, Jean-Claude Juncker, who also described the demand for extra measures as “unreasonable,” saying: “No parliament in the world would accept that.” |