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European leaders cast doubt over eurozone meeting on Greece Eurozone talks on Greece need 'a lot more progress' before possible deal
(about 2 hours later)
European leaders have cast doubt on whether Saturday’s meeting of eurozone finance ministers to discuss Greece’s latest economic reform proposals will result in a deal. Talks aimed at preventing Greece from leaving the eurozone and collapsing into bankruptcy are on a knife-edge amid widespread scepticism from the country’s creditors about whether Athens can deliver on its promises.
The German finance ministry spokesman Frank Paul Weber declined to comment on reports that Wolfgang Schäuble, the country’s finance minister, regarded Greece’s proposals as inadequate and was opposed further talks. Finance ministers from the 19 countries that use the euro were meeting in Brussels on Saturday to discuss Greece’s latest economic reform proposals, but several stressed they were looking for further reassurances.
“The minister will this afternoon discuss the assessment of the institutions with his eurozone colleagues. The result of the discussion is completely open,” Weber said. “Extraordinarily difficult talks lie ahead,” the German finance minister, Wolfgang Schäuble, said as he arrived for the meeting.
The Lithuanian president, Dalia Grybauskaitė, put the chances of a deal at 50/50. She said Athens’ proposals were based on outdated information and would have to be “seriously corrected”. EU sources who asked not to be named also put the probability at no more than 50/50. He said the Greek government would have to do a lot more than just say it wanted to reform if it was going to receive the requested bailout . “We will definitely not be able to rely on promises.”
Finance ministers from the 19 countries that use the euro are gathering in Brussels today to discuss whether the latest set of Greek proposals is enough to start negotiations on a third bailout for the country. The Greek government is looking for a €53bn (£38bn) bailout over three years, following two previous bailouts worth €240bn. In exchange, Athens is promising €13bn of spending cuts and reforms, including a pensions overhaul, tax rises and privatisations.
The Greek prime minister, Alexis Tsipras, has proposed €13bn (£9bn) of austerity cuts – including plans for a pensions overhaul, tax hikes and privatisations – in return for €53bn of bailout funds from the European Central Bank (ECB) over three years. The Greek parliament voted to back Alexis Tsipras’s proposals in the early hours of Saturday, but 17 government MPs failed to support the prime minister, either by voting against the plan, abstaining or not turning up to vote.
Tsipiras’s offer amounts to a U-turn after the country voted no to a similar deal in last weekend’s referendum. Divisions in Greece’s governing leftist coalition, as well as last Sunday’s resounding no vote to the austerity conditions attached to Greece’s international bailout, have sown doubts among eurozone countries about whether Athens can deliver on its plan.
He managed to win the backing of a majority of Greek MPs, with 251 of 300 voting to give him the go-ahead late on Friday night. A German government spokesman said the outcome was “completely open”, while unnamed EU officials put the chances of a deal at 50/50.
Three senior government figures were among nine MPs who abstained or voted against the deal, and several others from the ruling Syriza party stayed away, prompting speculation of an imminent government shakeup. Christine Lagarde, the head of the Initernational Monetary Fund, said before the talks: “We have to make a lot more progress.”
Tsipiras told MPs: “We have a national duty to keep our people alive ... we will succeed not only in staying in Europe but in living as equal peers with dignity and pride.” Tsipras and his new finance minister, Euclid Tsakalotos, have a mountain to climb if they are to win the confidence of their eurozone peers.
Many of the proposals involved were far from Syriza’s pledges, but it was the best deal available, he said. The deputy finance minister for the Netherlands, Eric Wiebes, said many governments had concerns about Greece’s ability to implement its proposed reforms. “After all, we are discussing a proposal from the Greek government that was seriously rejected one week ago.”
There will be another summit on Sunday at which the leaders of all 28 EU member states will gather. The European council president, Donald Tusk, said the meeting was the last chance for Greece and the EU to reach an agreement. Pierre Moscovici, the European commissioner for economic affairs, said Greece had made an important gesture with its latest proposals, but many ministers would be looking for more on implementation.
Failure to do so could lead to a Greek exit from the single currency and the termination of any assistance from the ECB to Greek banks, which remain closed. The country’s creditors – the IMF, the European commission and the European Central Bank – are united in the view that reform efforts have stagnated since the Tsipras government came to power in January. Trust has also weakened since Tsipras’s surprise decision two weeks ago to call a referendum on the bailout plan.
The French president, François Hollande, said the Greek proposals were “serious and credible”, but that nothing had been decided yet. The Italian prime minister, Matteo Renzi, said he was “more than optimistic”. Valdis Dombrovskis, the European commissioner in charge of the euro, said the latest Greek proposal showed progress had been made, but many issues and concerns remained. “The Greek government proposal is pretty much along the lines of the institutions’ proposal before the referendum.”
Malta’s finance minister, Edward Scicluna, said Saturday’s meeting had to resolve “a contradiction in terms” between a Greek government promising reforms and elected on a mandate to fight austerity.
“We have to be reassured that it’s not a question of words but a programme that can be implemented,” he said. “There are some who are very sceptical and those who are less sceptical.”