Fra Guardian:
Greece’s creditors are aiming to strike a deal on Monday to stop Athens defaulting on its debt and possibly tumbling out of the euro, by extending its bailout by six months, supplying up to €18bn in rescue funds and pledging later debt relief for the austerity-battered country.
But EU officials, privately disclosing details of the proposed deal, stressed that a breakthrough hinged on the prime minister, Alexis Tsipras, making concessions on fiscal targets, pensions cuts and tax increases that he has resisted since he came to power five months ago. Following a cabinet meeting in Athens, Tsipras is believed to have offered Greece’s creditors concessions on tax and pensions reform. But it was not clear whether the offer went far enough to make a final agreement possible on Monday.
Time is also running out for the Greek banking system, with Reuters reporting on Sunday that €1bn worth of withdrawal orders had been lodged with Greek banks over the weekend – on top of the €4bn that left the Greek banking system last week – and that the European Central Bank was set to discuss extending financial help to those institutions on Monday morning, amid fears that Greek banks would be unable to open on Tuesday.
Greek crisis: episodes of despair and drama as moment of truth nears
A hectic round of telephone diplomacy took place on Saturday and Sunday between leaders in Athens, Berlin, Paris and Brussels while technocrats on both sides sought to hammer out the small print of the fiscal arithmetic forming the basis for a last-minute agreement days before Greece’s bailout expires. Greece must pay €1.6bn owed to the International Monetary Fund by Tuesday 30 June.
With time running out, the only way an IMF default could now be avoided is for the ECB to raise the ceiling on the short-term debt or T-bills Athens is allowed to sell, the officials said. This would need to happen by Monday next week.
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The sources also signalled moves to assuage Tsipras’s key demand – that the creditors need to offer debt relief to Greece. Some form of debt restructuring would be promised to Athens, but it would come with strings attached and not as part of the current bailout package, they said.
Eurozone finance ministers will meet at lunchtime on Monday in Brussels, four days after a previous session collapsed in mutual recrimination in Luxembourg. Their meeting was brought forward by two and a half hours and will be followed by an emergency eurozone summit in Brussels aimed at averting the first ever departure of a country from the single currency.
The summit is a success for Tsipras who has consistently demanded that the debt crisis can be resolved only by Europe’s political leaders. But for the summit to have a chance of succeeding, the finance experts from the creditors – the IMF, the European Central Bank and the European commission – and their Greek counterparts have to nail down the detail to put before the ministers and government leaders.
If the talks remain inconclusive on Monday evening, another eurozone summit could be convened, either next week as Greece’s bailout lapses or as part of a regular scheduled full EU summit on Thursday and Friday.
“This will entirely depend on the eurogroup [finance ministers] and the summit tomorrow,” said one official.
