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Greece bailout talks under way in drive for last-minute deal Greece bailout talks break down again
(about 3 hours later)
Crisis talks between Greece and its creditors are underway in a desperate search for a deal to prevent Greece from bankruptcy. Talks on the Greek debt crisis between eurozone finance ministers have ground to a halt after Athens rejected counter-proposals from its creditors.
Eurozone finance ministers have gathered in Brussels for an emergency meeting –their fourth in eight days – before a long-planned summit of all 28 EU leaders. Eurozone finance ministers came to Brussels for an emergency meeting but failed to bridge their differences with Greece, in the fourth diplomatic failure in eight days. The EU commissioner for economic and financial affairs, Pierre Moscovici, said Greece and its creditors were still at loggerheads over reforms to Greek pensions and VAT rates, which lenders want to be toughened as a quid pro quo for giving Athens further bailout funds.
Hopes of a breakthrough were falling as the ministers meeting began. Germany’s finance minister, Wolfgang Schäuble, said Greece had moved backwards. The chair of the Eurogroup, Jeroen Dijsselbloem, said ministers would be waiting to hear ideas from the Greeks. Greece’s creditors - the European Commission, International Monetary Fund and European Central Bank - are demanding further spending cuts in Athens before agreeing to release the €7.2bn in funds that the country needs in order to meet a €1.6bn payment due to the IMF next Tuesday. The finance ministers are expected to reconvene on Saturday for further talks as the crisis goes to the wire.
EU officials are insisting a deal is still in reach, although Athens has not signed up to the latest proposal from creditors. Related: Greek crisis: Finance ministers meeting ends with no deal - live updates
The Greek prime minister, Alexis Tsipras, spent more than three hours in a meeting with the leaders of the International Monetary Fund, European Central Bank and European commission on Thursday morning, but left without an agreement. The Greek finance minister, Yanis Varoufakis, said both sides would continue to seek an agreement, as they attempt to square the differences between a Greek plan submitted on Monday and a counter-proposal from the lenders. He said: “We shall continue our deliberations, the institutions are going to look again at the two documents - our documents and their own, there will be discussions with the Greek government, and we’ll continue until we find a solution.”
Meanwhile, the IMF told reporters in Washington that it would not move its 30 June deadline for the €1.6bn payment. “As a matter of longstanding policy, the Fund does not extend payment deadlines,” said a spokesman for the IMF.
Wrangling over the Greek debt crisis is overshadowing a summit of all 28 EU leaders, where politicians are discussing migration and David Cameron’s proposals for renegotiating Britain’s relationship with the EU.
But hopes of a breakthrough were fading even before the ministers sat round the table. Arriving at the meeting, Germany’s finance minister, Wolfgang Schäuble, said Greece had moved backwards, a message that was echoed by the German chancellor Angela Merkel. The chair of the Eurogroup of finance ministers, Jeroen Dijsselbloem, said ministers would be waiting to hear ideas from the Greeks.
Ahead of the meeting on Thursday morning, the Greek prime minister, Alexis Tsipras, spent more than three hours in a meeting with the leaders of the International Monetary Fund, European Central Bank and European commission, but left without an agreement.
Despite the stalemate, Tsipras said he was confident of reaching a compromise that would allow Greece to overcome the crisis: “European history is full of disagreements, negotiations, and then compromises.”
Rumours were swirling that Greece’s creditors were going to present Athens with an ultimatum to accept their austerity plan in exchange for releasing €7.2bn (£5.1bn) in bailout funds.Rumours were swirling that Greece’s creditors were going to present Athens with an ultimatum to accept their austerity plan in exchange for releasing €7.2bn (£5.1bn) in bailout funds.
Related: Greek crisis: Bailout talks resume in race for a deal - live updates
But one EU diplomat said there was no take-it-or-leave-it deal and institutions remained available for further discussion.But one EU diplomat said there was no take-it-or-leave-it deal and institutions remained available for further discussion.
Membership Event: Guardian Newsroom: Can Greece be saved?
The two sides still appear to be far apart, however. Greece’s creditors want the Tsipras government to make deeper spending cuts, as well as faster and more sweeping reforms to the Greek pension system, according to a leaked version of the creditors’ counter-proposals that is very similar to an earlier version rejected by the Greeks on Wednesday.The two sides still appear to be far apart, however. Greece’s creditors want the Tsipras government to make deeper spending cuts, as well as faster and more sweeping reforms to the Greek pension system, according to a leaked version of the creditors’ counter-proposals that is very similar to an earlier version rejected by the Greeks on Wednesday.
Arriving for the talks, Austria’s finance minister, Hans Jörg Schelling, said Sunday was the final deadline to reach an agreement with Greece, although he hoped to get a deal done on Thursday afternoon ahead of the EU leaders’ summit.
“Where there is a will, there is a way,” tweeted Pierre Moscovici, European commissioner for economic affairs.
Eurozone ministers had been expected to work through Wednesday night to resolve the impasse over the bailout. But the meeting broke up after little more than an hour, when it became clear both sides remained far apart on how to fix the Greek economy.
Greece’s lenders are pressing Athens to accept more austerity in exchange for continuing the bailout programme worth €240bn (£171bn). Tsipras, who has been seeking to wrest back control over the Greek economy, has accused the lenders of not wanting a deal and serving “special interests” in Greece.Greece’s lenders are pressing Athens to accept more austerity in exchange for continuing the bailout programme worth €240bn (£171bn). Tsipras, who has been seeking to wrest back control over the Greek economy, has accused the lenders of not wanting a deal and serving “special interests” in Greece.
As the talks stagger on, a senior Syriza official accused the creditors of trying to blackmail Greece. “The lenders’ demand to bring annihilating measures back to the table shows that the blackmail against Greece is reaching a climax,” Nikos Filis, the Syriza’s parliamentary spokesman told Greek broadcaster Mega TV, reported Reuters. As the talks stagger on, a senior Syriza official accused the creditors of trying to blackmail Greece. “The lenders’ demand to bring annihilating measures back to the table shows that the blackmail against Greece is reaching a climax,” Nikos Filis, the Syriza’s parliamentary spokesman, told Greek broadcaster Mega TV.
European leaders hope to rubber-stamp a deal before the end of their two-day summit, which starts on Thursday afternoon. Carl Weinberg, chief economist at High Frequency Economics, told investors to expect more conflicting reports, both positive and negative about the Greek crisis. “We have no idea how this will end,” he added.
The German chancellor, Angela Merkel, has been reluctant to allow Greek talks to derail the long-planned summit, where leaders will discuss how to deal with thousands of migrants fleeing poverty and war and hear a presentation from the British prime minister, David Cameron, on his hopes for EU reform. Time is running out fast, with Greece’s eurozone bailout set to expire on Tuesday, alongside the IMF payment.
Membership Event: Guardian Newsroom: Can Greece be saved?
Carl Weinberg, chief economist at High Frequency Economics, told his investors to expect more conflicting reports, both positive and negative about the Greek crisis. “We have no idea how this will end,” he added.
Time is running out fast, with Greece’s eurozone bailout set to expire on Tuesday, when it is also due to repay €1.6bn to the IMF.
The Tuesday deadline is doubly pressing because the ECB, which is keeping the Greek banking system on life support, has indicated it will not support banks if the bailout programme expires without a new agreement in place. Without ECB support, Greek banks are expected to buckle, which would force the Tsipras government to impose capital controls and threaten an exit from the eurozone.The Tuesday deadline is doubly pressing because the ECB, which is keeping the Greek banking system on life support, has indicated it will not support banks if the bailout programme expires without a new agreement in place. Without ECB support, Greek banks are expected to buckle, which would force the Tsipras government to impose capital controls and threaten an exit from the eurozone.
The ECB, which is holding daily meetings on Greece, has pumped about €89bn into the Greek financial system to keep banks afloat. On Thursday it decided to maintain emergency liquidity funding at current levels, suggesting that the pace of withdrawals from Greek banks may have ebbed.The ECB, which is holding daily meetings on Greece, has pumped about €89bn into the Greek financial system to keep banks afloat. On Thursday it decided to maintain emergency liquidity funding at current levels, suggesting that the pace of withdrawals from Greek banks may have ebbed.
Even if a deal is finally struck in Brussels, Tsipras has to get the compromise through a rebellious and recalcitrant parliament. Germany’s parliament and those of other eurozone countries also have to ratify the package before it can be implemented, raising questions as to whether all this can be accomplished before the Tuesday deadline.Even if a deal is finally struck in Brussels, Tsipras has to get the compromise through a rebellious and recalcitrant parliament. Germany’s parliament and those of other eurozone countries also have to ratify the package before it can be implemented, raising questions as to whether all this can be accomplished before the Tuesday deadline.
Many observers fear that any deal emerging from Brussels may only be a temporary stopgap that does little to ease the massive debt burden weighing on the Greek economy.Many observers fear that any deal emerging from Brussels may only be a temporary stopgap that does little to ease the massive debt burden weighing on the Greek economy.
“Without a substantial form of debt relief, which looks unlikely in an initial agreement, Greece’s debt ratio will remain unsustainably high and the crisis will continue,” said Jonathan Loynes, chief European economist at Capital Economics.“Without a substantial form of debt relief, which looks unlikely in an initial agreement, Greece’s debt ratio will remain unsustainably high and the crisis will continue,” said Jonathan Loynes, chief European economist at Capital Economics.