Greece asked to make ‘credible’ proposals for debt deal
French and German leaders say “the door is open to discussions” as Greek PM set to unveil his plan at eurozone meet.
Published On 7 Jul 2015
Germany and France have asked Greece to make detailed proposals to revive bailout talks, a day after Greek voters decisively rejected creditors’ demands for further austerity, plunging Europe into crisis.
“The door is open to discussions,” said French President Francois Hollande after crisis talks in Paris with German Chancellor Angela Merkel.
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“It is now up to the government of Alexis Tsipras to make serious, credible proposals so that this willingness to stay in the eurozone can translate into a lasting programme.”
With Greece’s economy gasping for air, the authorities extended an eight-day bank closure until Thursday amid fears cash machines in the country were running dry.
The European Central Bank, which has been keeping Greek lenders afloat, meanwhile announced it would maintain a key financial lifeline to Greek banks, but raised the bar for them to access the emergency funds.
Greek Prime Minister Alexis Tsipras is to unveil his government’s proposals on Tuesday at a hastily arranged emergency summit of the 19 eurozone countries in Brussels. He spoke to the German Chancellor earlier in the day regarding the new proposals.
Late on Monday, a Greek government source said that Tsipras had spoken to ECB chief Mario Draghi in efforts to reopen banks with assistance from the Frankfurt-based lender.
Tsipras also spoke to IMF chief Christine Lagarde “on the need to find a viable solution dealing with the real problems of the Greek economy”, the source said.
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For her part, Merkel said the conditions for a new Greek rescue package “have not yet been met”.
“And that is why we are now waiting for very precise proposals from the Greek prime minister, a programme that will allow Greece to return to prosperity,” said Merkel, adding that eurozone countries had already shown “a lot of solidarity with Greece”.
The Netherlands’ Prime Minister Mark Rutte said that Greece will have to accept deep reforms if it wants to remain in the eurozone.
| Profile: Euclid Tsakalotos |
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The incoming Greek finance minister, Euclid Tsakalotos, was born in 1960 in Rotterdam, the Netherlands. He studied economics, politics and philosophy at the universities of Oxford and Sussex, before completing his PhD in 1989 at the University of Oxford. He has taught at the University of Kent, the Athens University of Economics and the National and Kapodistrian University of Athens. He is the author of six books and many articles, and editor of three volumes. In May 2012 and January 2015, he was elected an MP of the Coalition of the Radical Left (Syriza). |
“Now the [Greek] government stands at a crossroads: they have to make a decision tonight on what they are going to do tomorrow – if they are coming with serious proposal to the Eurogroup and eurozone summit or not. That is really what is going on now,” he said.
As Athens awoke after a night of celebration after the “No” camp won the referendum, Greece’s Finance Minister Yanis Varoufakis announced he was stepping down to try to ease friction with creditors.
Varoufakis had infuriated European counterparts by lashing out at demands for economic reform and welfare cuts as “terrorism” and “fiscal waterboarding”.
On Monday, he was replaced by economist Euclid Tsakalotos, Greece’s top negotiator in the stalled EU-IMF talks, as the country’s new finance minister, the president’s office said.
“We want to continue the discussion,” Tsakalotos said, adding that Greeks “deserved a better deal” and “could not accept a non-viable deal”.
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“Greek people on Sunday proved that they were not afraid,” he said.
Despite its tougher approach on debt relief, Germany said that eurozone leaders should discuss humanitarian aid for a country fatigued by years of belt-tightening and chronic unemployment.
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In Sunday’s plebiscite, voters, who had been asked whether to accept or reject the austerity measures demanded by lenders in return for rescue loans, delivered a resounding 61-percent strong “No” vote.
Many Athenians awoke on Monday yet again to the grim reality of closed banks and more lines at cash machines to make their daily withdrawal limit of 60 euros ($66), as fears grew the ATMs could soon run dry.
Greece last week defaulted on a $1.8bn repayment to the International Monetary Fund but Lagarde said her organisation was “ready to assist Greece if requested to do so”.
Tsipras, 40, insists that instead of the so-called Grexit, the creditors will now finally have to talk about restructuring Greece’s massive 240 billion euro ($267bn) debt to them.
Source: Al Jazeera, News Agencies